What is the journal entry to record accrued payroll?
An entry to accrued payroll is necessary when an employee has earned part of their salary but it will not be paid until the following month. This is common when there is a difference between the calendar month end and the routine payroll schedule. When this occurs, the entry will be a debit to payroll expense (since the employee worked) and a credit to accrued payroll.
In the subsequent month when the employee is paid, the debit is to accrued payroll and a credit to cash (since there is a cash outflow to pay the employee). There is no impact to the income statement when the payroll accrual is reversed.
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