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Bookkeeping Controls (Payroll Procedures (Accounting for Payroll (Wages…

- - - - Net Pay = Gross Pay - PAYE - Employee's NIC - Other Deductions
    - - Total Wages Expense = Gross Pay + Employer's NIC + Employer's pension contribution
    - - Total Employee Liability = PAYE + Employee/Employer's NIC + Employee/Employer's Pension Contribution
- - - - Single Entry
        
        Only one side of the entry being made.
      - Casting (addition) Error
        
        If a ledger account hasn't been balanced correctly due to a casting error therefore the trial balance won't balance.
      - Transposition Error
        
        If an amount or balance of a ledger account has been incorrectly recorded. (e.g. recording £2591 on the debit side and recording the credit side as £2951)
      - Extraction Error
        
        If a ledger account balance is incorrectly recorded on the trial balance as an incorrect figure or on the wrong side.
      - Omission (of a ledger balance)
        
        If a ledger account balance is accidentally left off of the Trial Balance.
      - Two entries on one side
        
        A debit in two accounts or a credit in two accounts rather than a debit with an opposite credit(s)
    - - Error of Original Entry
        
        When the wrong figure is recorded for the debit and the credit entry so the incorrect figure appears on both sides.
      - Compensating Error
        
        This is where two separate errors of the exact same amount are made, one for the credit entry and one for the debit entry
      - Error of Omission
        
        When an entire transaction is omitted from the ledger accounts.
      - Error of Commission
        
        When an equal credit and debit entry are made but one of the entries has been made to the wrong account. Genuine silly mistake.
      - Error of Principle
        
        Similar to the Error of Commission although the entry was made deliberately but in the wrong type of account. Lack of knowledge , doesn't know difference between different expenditures etc
        
        (e.g. recording an expense entry in a capital account)
      - Reversal of Entries
        
        When Debit and Credit entries are entered into the correct account although they're on the wrong sides.
  - - - Dr Irrecoverable Debt Expense (net)
        Dr VAT
        Cr SLCA (gross)(and sub sale ledger)
    - - Dr Irrecoverable Debt Expense
        Cr SLCA (and sub sale ledger)
- - - - These are cheques that have been issues by the business but are yet to appear on the bank statement. This is because the cheque has not cleared the banking system.
    - - This is money received by the business that hasn't appeared on the bank statement yet. This is usually cheques that haven't cleared the banking system.
- - - - Dr VAT Control Account
        Cr Bank Account
    - - Dr Bank Account
        Cr VAT Control Account
  - - - Enables business to focus on chasing older debts.
- - - - The balances brought down (bal b/d) are transferred and listed on the trial balance on the same side they were brought down.
    - - Insert the bal c/d on the other side referring to it as the bal b/d
      - On the side with a smaller total find the difference between the two totals and insert it here. This is known as the bal c/d
      - Insert the highest total on each side of the ledger.
      - Find the total of each side and make a note.