end of year adjustments

end of year adjustments

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At year end there maybe wages due to employees that are within creditors and not paid off through bank. Is it necessary to credit bank and debit creditors control?
Colin

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By Accounting WEB
09th Oct 2002 06:33

A provision should be made
Provide for the unpaid wages and credit Other Creditors.

On a similar case, I know of a company which issued a cheque of a material amount in its financial year end to "pay" a creditor. This cheque was apparently unpresented about three weeks after the financial yr-end. The auditors actually reversed the original entries of this material amount.

Colin, is the wages cheque a material sum?

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By pondfield
08th Oct 2002 16:10

A creditor is just that
If the salaries are unpaid at the year end (cheque not drawn) then they are creditors. If a cheque has been drawn (and given to the employee) but has not gone through the bank account then it is an outstanding cheque on the bank reconcilliation.

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