CenterPoint Accounting for Agriculture - Payroll Transactions and Cash Basis Reports

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Document #:	3213	Product:	CenterPoint® AG Accounting with CenterPoint Payroll

 

The transactions posted by CenterPoint Payroll to the general ledger in CenterPoint Accounting are different on cash basis reports than on accrual basis reports. This document shows an example of how payroll posts on a Cash Income Statement and a Cash Balance Sheet. This is for the full CenterPoint Payroll program and does not apply to the Basic Payroll option within CenterPoint Accounting for Agriculture.

Example Payroll Transaction

Below is an example of one employee's paycheck processed in CenterPoint Payroll. The Gross Pay is $800, the Net Pay is $660.67 and the Employer share of taxes is $66.64.

Cash Basis Financial Statements Before Paying Invoices for Taxes

1. Cash Income Statement - Before paying the invoices generated by payroll for the taxes, the cash income statement only shows an expense for the gross pay. The employer taxes are not yet a cash expense because they have not been paid yet.

2. Cash Balance Sheet - The cash balance sheet shows the net pay subtracted from the checking account. The employee share of taxes show in the payroll liability accounts. The employer share of taxes does not.

Cash Basis Financial Statements After Paying Invoices for Taxes

1. Cash Income Statement - The cash income statement now shows the employer share of taxes as an expense.

2. Cash Balance Sheet - Checking is now reduced by the net pay, employee tax and employer tax amounts. The liabilities for the employee share of tax have been cleared.

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