Bonus Paid After Start Dates ?

Hello,

QB Premier 2005 Edition

If the fiscal year end is June 30, 2005 for a corporation, and my start date is July 1st, 2005 for QB, since I just purchased the software then what / how can I solve the following scenario ?

I pay myself a 1-time salary/bonus for eg. $20,000 for the last fiscal year before July 1st 2005. The catch is that I write myself a cheque today, which is a few weeks/months after the fiscal year end.

The $20,000 expense counts for last year, or the fiscal year that just ended June 30, 2005.

However since I write the cheque today in September 2005, and the money will come out of the corporate account in September 2005, what implications does this have for the way I use Quickbooks ?

Should I not enter the expense (cheque) into Quickbooks, and should i somehow adjust the Bank Opening Balance on July 1,

Since I already entered an opening balance into the BANK type can I edit this opening balance ?

What is needed to be done to account for this issue now ? Remember, the start date is July 1, 2005 for QB Premier.

Brilliant !! . . . :o)

- ____ _ | __\_\_o____/_|

Record the transactions exactly as they happen. Use the memo field to indicate they are for the previous year. Then Journal Entry the amount from this years relevant Payroll Account to last years.

This will then affect last years P&L and still show the correct timeline of the transactions this year without affecting P&L. The fact that you didn't use the software for last year isn't important.

Stan

The answer is the same no matter what accounting program you use. It is an accounting question and perhaps a tax question that should be refered to your accountant.

In any event the answer is to reverse the accrual when actually paid.

Probably not because we have no idea how the OP records payroll, and quite doubtful the actual payment would be exactly 20K to begin with.

Since we do not have all the facts the best advice is to record the payroll in the normal manner and make a journal entry to reverse the accrual.

What about posting a G/J transaction where you accrue the salary/bonus payable as of June 30th.

DR Salary/Bonus Expense 20,000.00 CR Salary/Bonus Payable 20,000.00 To accrue salaries/bonuses payable.

This way the EXPENSE is on the books for June 30th.

Then you write yourself the cheque on whatever date you like.

Thank-you! Thank-you!

Now, convince my boss I deserve a raise...

:)

Shouldn't the posting for the payment look like this:

DR Salary/Bonus Payable 20,000.00 CR Bank 20,000.00

Of course using the Write Cheques/Make Payments function.

This would effectively "reverse the accrual", wouldn't it?

Alternatively, the OP would be wise, if using the Payroll module, to cut himself a payroll cheque, and making sure to account for all payroll taxes due various levels of government. This is assuming this is what the OP usually does, rather than just taking the 20K and paying the taxes on it at tax time...

Stephanie