General

Accruing Annual Employee Bonuses

Recording the expense for bonuses earned in the current year but paid in the next year.

Account NameTypeDebit ($)Credit ($)
Bonus ExpenseExpense (+)20,000.00-
Bonuses PayableLiability (+)-20,000.00

💡 Accountant's Note

Bonuses must be matched to the year the performance occurred, even if the check isn't cut until February.

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