Understanding General Ledger Basics
The following is an example of a posting using payroll calculations for an employee. This posting illustrates how debits and credits are posted to the various General Ledger accounts:
Description |
Amount |
Entry Type |
Account Type |
Gross pay |
1000.00 |
Debit |
Employee expense |
FICA |
100.00 |
Credit |
Social security liability |
Federal withholding |
200.00 |
Credit |
Federal withholding liability |
State withholding |
25.00 |
Credit |
State withholding liability |
City withholding |
5.00 |
Credit |
City withholding liability |
401K |
20.00 |
Credit |
401K liability |
Insurance |
50.00 |
Credit |
Insurance liability |
Paycheck |
600.00 |
Credit |
Payroll Cash |
In addition, the following are automatically calculated: |
|||
Company FICA |
100.00 |
Credit |
Social security liability |
|
100.00 |
Debit |
Social security expense |
Notes: If there are additional payroll deductions set up in the (LHN) Payroll/Personnel Parameters screen, they are treated similarly to the deductions in the above example. For more information, see In the (LHN) Screen.
The information contained in the above example is printed on a G/L summation page at the end of a Payroll Register.