Compute payroll accrual. Compute the number of days to be accrued.

In this
case, assume you need to accrue 7 days — the last week of March. Your payroll
accrual is (7 days × $200 per day = $1,400).
3. Post your accrual entry. Here’s the entry you post on March 31 to accrue
unpaid March payroll:
Debit Credit
Payroll expenses $1,400
Accrued payroll expenses $1,400
To record payroll expenses for the last week of March.
After the cash is actually paid out, you debit to reduce the liability account (accrued
payroll expenses) and credit cash account, to account for the payment. Doing
these extra entries may seem like a lot of extra work, but if you didn’t match the
payroll expenses for March with the revenues for March, your income statements
wouldn’t reflect the actual state of your affairs. Without the payroll accrual, your
March payroll would be understated.

Testing an Adjusted Trial Balance

In Chapter 5, you find out why and how you run a trial balance on the accounts
in your general ledger. Adjustments to your books call for another trial balance,
the adjusted trial balance, to ensure that your adjustments are correct and ready to
be posted to the general ledger. You track all the adjusting entries on a worksheet
similar to the one shown in Chapter 5. You need to use this worksheet only if
you’re doing your books manually. It’s not necessary if you’re using a computerized
accounting system.
The key difference in the worksheet for the adjusted trial balance is that additional
columns must be added to the worksheet. Columns include
»»Column 1: Account titles.
»»Columns 2 and 3: Unadjusted trial balance — the trial balance before the
adjustments are made — with Column 2 for debits and Column 3 for credits.
Columns 4 and 5: Adjustments. All adjustments to the trial »»