# How do I accrue wages at month end when the pay period straddles the closing date?
- **[United States · Employers preparing periodic financial statements that have unpaid wages at a period end · accrual basis]** A wage accrual is described as a journal entry whose purpose is to recognise the portion of wages that is unpaid at the end of a reporting period. → [CG-MCE-050#S11](#s-CG-MCE-050-S11)
- **[United States · Employers computing a wage accrual for employees with unpaid time at period end · accrual basis]** The article states that the information for the wage accrual entry is most easily derived from a spreadsheet itemising each employee to whom the calculation applies, the amount of unpaid time, and that person’s standard pay rate; it is offered as the easiest source of the information rather than as the only permissible basis. → [CG-MCE-050#S12](#s-CG-MCE-050-S12)
- **[US — publisher is a US accounting CPE provider (site carries State CPE Requirements); the article itself names no other jurisdiction · Illustrative single employee paid a fixed monthly salary · Accrual basis]** In the article's worked example, an employee on a fixed salary of $10,000 per month paid on the 25th of the month is owed five days of pay at month-end, which the article states is 16.6% of his full-month salary; the example illustrates apportioning a fixed monthly salary for the part of the period falling after the pay date, and is presented as an illustration rather than as a required method. → [CG-MCE-050#S13](#s-CG-MCE-050-S13)
- **[United States (article is written to the US tax regime — refers to the IRS and to 401(k) plans) · Employers that run a payroll for employees]** The payroll accrual entry is simpler than the comprehensive payroll entry because payroll taxes are typically clumped into a single expense account and an offsetting liability account. → [CG-MCE-050#S15](#s-CG-MCE-050-S15)
- **[United States (article is written to the US tax regime — refers to the IRS and to 401(k) plans) · Employers that run a payroll for employees]** After the accrual entry is recorded, it should be reversed at the beginning of the following accounting period, and the actual payroll expense should then be recorded when it occurs using the primary payroll journal entry. → [CG-MCE-050#S20](#s-CG-MCE-050-S20)
## What this page establishes
- The recognition test behind the accrual — Established
- Employer-borne payroll costs that accrue with the wages — Not established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- Where the accrual sits and how it comes off the books — Partly established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- How the system creates, dates and reverses the entry — and how you check it happened — Not established
- What has to support leaving it out — Partly established
- Support for the estimate, and using the same method every period — Not established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation.)
- Measuring the portion from the payroll records you have at the closing date — Established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- Costs the employer bears itself versus amounts withheld from employees — Not established
- Whether the accrual must carry the same job and department attributions as ordinary wage cost — Not established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- Does work already done have to be booked in the month that is closing? — Partly established
- When you can leave the accrual out — Partly established
- Finding the earned but unpaid portion — Established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- What goes into the accrual besides the wages themselves — Not established (Required authority: authoritative professional or accounting standard, primary regulator or government. Highest achieved: high quality professional secondary reference.)
- Which account holds the accrual — Not established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- Reverse it next period, or relieve it against the actual run? — Partly established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation.)
- How next period's payroll entry meets the accrual — Not established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- When the actual pay differs from what you accrued — Partly established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- Writing it down so someone else can reproduce it — Not established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation.)
- Splitting the accrual across jobs, departments and locations — Not established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- Doing it in your accounting system — Partly established
## Does work already done have to be booked in the month that is closing?
- The three recognition criteria are named as: Definitions (the item meets the definition of an element of financial statements); Measurability (the item is measurable and has a relevant measurement attribute); and Faithful Representation (the item can be depicted and measured with faithful representation). _(jurisdiction: United States, entity_scope: reporting entities preparing general purpose financial statements, accounting_basis: FASB conceptual framework for financial reporting (concepts used by the Board in setting standards); this Concepts Statement does not itself establish GAAP, effective_from: 2023-08, conditions: the a./b./c. list labels are printed in a separate column in the source PDF and appear on their own lines at TEXT.txt lines 98–100; criteria are stated as concepts for the Board to consider in standard setting, not as an entity-level accounting requirement)_ `CG-MCE-050#S01`
> “Definitions—The item meets the definition of an element of financial
statements.
Measurability—The item is measurable and has a relevant measurement
attribute.
Faithful Representation—The item can be depicted and measured with
faithful representation.” — [Financial Accounting Standards Board of the Financial Accounting Foundation — Statement of Financial Accounting Concepts No. 8, Conceptual Framework for Financial Reporting — Chapter 5, Recognition and Derecognition](https://storage.fasb.org/Concepts%20Statement%208%E2%80%94Chapter%205%E2%80%94Recognition%20and%20Derecognition.pdf), 2023-08; Chapter 5 — Recognition Criteria — paragraph RD5(a)–(c), the listed criteria (TEXT.txt lines 102–107). Verified 2026-09-09.
- An item must meet the definition of an element in Chapter 4, Elements of Financial Statements, of this Concepts Statement in order to be recognized in financial statements. _(jurisdiction: United States, entity_scope: reporting entities preparing general purpose financial statements, accounting_basis: FASB conceptual framework for financial reporting (concepts used by the Board in setting standards); this Concepts Statement does not itself establish GAAP, effective_from: 2023-08, conditions: the element definitions themselves are in Chapter 4, which is not part of this pinned document)_ `CG-MCE-050#S02`
> “RD8. An item must meet the definition of an element in Chapter 4, Elements of
Financial Statements, of this Concepts Statement to be recognized in financial
statements.” — [Financial Accounting Standards Board of the Financial Accounting Foundation — Statement of Financial Accounting Concepts No. 8, Conceptual Framework for Financial Reporting — Chapter 5, Recognition and Derecognition](https://storage.fasb.org/Concepts%20Statement%208%E2%80%94Chapter%205%E2%80%94Recognition%20and%20Derecognition.pdf), 2023-08; Chapter 5 — Element Definitions — paragraph RD8 (TEXT.txt lines 122–124). Verified 2026-09-09.
_Partly established. Established: the criterion that decides whether unpaid earned wages must be recognised in the period the work was performed (S09, S10). Missing: how the reader applies that criterion to their own books._
## The recognition test behind the accrual
- See above: The three recognition criteria are named as: Definitions (the item meets the definition of an element of financial statements); Measurability (the item is measurable and has a relevant measurement attribute); and Faithful Representation (the item can be depicted and measured with faithful representation). ([CG-MCE-050#S01](#s-CG-MCE-050-S01))
- See above: An item must meet the definition of an element in Chapter 4, Elements of Financial Statements, of this Concepts Statement in order to be recognized in financial statements. ([CG-MCE-050#S02](#s-CG-MCE-050-S02))
- An item must be measurable with a relevant measurement attribute in order to be recognized in financial statements. _(jurisdiction: United States, entity_scope: reporting entities preparing general purpose financial statements, accounting_basis: FASB conceptual framework for financial reporting (concepts used by the Board in setting standards); this Concepts Statement does not itself establish GAAP, effective_from: 2023-08)_ `CG-MCE-050#S05`
> “RD9. An item must be measurable with a relevant measurement attribute to be
recognized in financial statements.” — [Financial Accounting Standards Board of the Financial Accounting Foundation — Statement of Financial Accounting Concepts No. 8, Conceptual Framework for Financial Reporting — Chapter 5, Recognition and Derecognition](https://storage.fasb.org/Concepts%20Statement%208%E2%80%94Chapter%205%E2%80%94Recognition%20and%20Derecognition.pdf), 2023-08; Chapter 5 — Measurability — paragraph RD9, first sentence (TEXT.txt lines 130–131). Verified 2026-09-09.
- The Board concluded that the phrase 'sufficient reliability' should be removed from the measurability criterion, and that an item meeting the definition of an element should be recognized when it can be measured with a relevant measurement attribute and faithfully represented through depiction and measurement, although the degree of measurement uncertainty may affect the decision usefulness of the information. _(jurisdiction: United States, entity_scope: reporting entities preparing general purpose financial statements, accounting_basis: FASB conceptual framework for financial reporting (concepts used by the Board in setting standards); this Concepts Statement does not itself establish GAAP, effective_from: 2023-08, conditions: reasoning in the basis for conclusions, which paragraph BC5.1 describes as a summary of the Board's considerations)_ `CG-MCE-050#S06`
> “BC5.7. The Board concluded that to reduce ambiguity in the measurability
criterion, the phrase sufficient reliability should be removed. However, an item that
meets the definition of an element should be recognized in financial statements
when it can be (a) measured with a relevant measurement attribute and (b)
faithfully represented through depiction and measurement—although, as noted in
paragraph RD10, the degree of measurement uncertainty may affect the decision
usefulness of the financial information.” — [Financial Accounting Standards Board of the Financial Accounting Foundation — Statement of Financial Accounting Concepts No. 8, Conceptual Framework for Financial Reporting — Chapter 5, Recognition and Derecognition](https://storage.fasb.org/Concepts%20Statement%208%E2%80%94Chapter%205%E2%80%94Recognition%20and%20Derecognition.pdf), 2023-08; Chapter 5 — Appendix A: Basis for Conclusions — Measurability Criterion — paragraph BC5.7 (TEXT.txt lines 337–343). Verified 2026-09-09.
## When you can leave the accrual out
- All three recognition criteria are subject to the cost constraint — the benefits from recognizing a particular item should justify the costs of providing and using the financial information — and recognition is also subject to materiality considerations. _(jurisdiction: United States, entity_scope: reporting entities preparing general purpose financial statements, accounting_basis: FASB conceptual framework for financial reporting (concepts used by the Board in setting standards); this Concepts Statement does not itself establish GAAP, effective_from: 2023-08)_ `CG-MCE-050#S07`
> “RD7. All three criteria are subject to the cost constraint: the benefits from
recognizing a particular item should justify the costs of providing and using the
financial information. Recognition also is subject to materiality considerations.” — [Financial Accounting Standards Board of the Financial Accounting Foundation — Statement of Financial Accounting Concepts No. 8, Conceptual Framework for Financial Reporting — Chapter 5, Recognition and Derecognition](https://storage.fasb.org/Concepts%20Statement%208%E2%80%94Chapter%205%E2%80%94Recognition%20and%20Derecognition.pdf), 2023-08; Chapter 5 — Recognition Criteria — paragraph RD7 (TEXT.txt lines 115–117). Verified 2026-09-09.
_Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._
- The accrued wages entry may be avoided where the amount involved is immaterial. _(jurisdiction: United States (article is written to the US tax regime — refers to the IRS and to 401(k) plans), entity_scope: Employers that run a payroll for employees, conditions: the amount of unpaid wages is immaterial)_ `CG-MCE-050#S08`
> “This entry may be avoided if the amount is immaterial.” — [AccountingTools, Inc. (Steven Bragg) — Payroll journal entries](https://www.accountingtools.com/articles/payroll-entries), 2026-03-04; Section "Accrued Wages Entry", third sentence. Verified 2026-09-09.
_Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._
- Some unpaid wages at the end of an accounting period are quite common, and the expense should be accrued if it is material. _(jurisdiction: United States (article is written to the US tax regime — refers to the IRS and to 401(k) plans), entity_scope: Employers that run a payroll for employees, conditions: the amount of unpaid wages is material)_ `CG-MCE-050#S09`
> “It is quite common to have some amount of unpaid wages at the end of an accounting period, so you should accrue this expense (if it is material).” — [AccountingTools, Inc. (Steven Bragg) — Payroll journal entries](https://www.accountingtools.com/articles/payroll-entries), 2026-03-04; Section "Accrued Payroll Journal Entry", first sentence. Verified 2026-09-09.
_Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._
- The article states that the accrued salaries concept is used only in businesses on the accrual basis of accounting, under which expenses are recognized as incurred, and is not used under the cash basis. _(jurisdiction: US — publisher is a US accounting CPE provider (site carries State CPE Requirements); the article itself names no other jurisdiction, entity_scope: Businesses employing the accrual basis of accounting, accounting_basis: Accrual basis; expressly not the cash basis)_ `CG-MCE-050#S10`
> “This concept is only used in businesses that employ the accrual basis of accounting, under which expenses are recognized as they are incurred. The accrued salaries concept is not used under the cash basis of accounting.” — [AccountingTools, Inc. (author Steven Bragg) — Accrued salaries definition](https://www.accountingtools.com/articles/accrued-salaries), 2026-05-15; Section "What are Accrued Salaries?", third and fourth sentences. Verified 2026-09-09.
_Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._
_Partly established. Established: when an accrual may properly be omitted on materiality grounds (S07, S08); when an accrual may properly be omitted on basis grounds (S10). Missing: what the reader must be able to show to support that decision._
## What has to support leaving it out
- See above: All three recognition criteria are subject to the cost constraint — the benefits from recognizing a particular item should justify the costs of providing and using the financial information — and recognition is also subject to materiality considerations. ([CG-MCE-050#S07](#s-CG-MCE-050-S07))
- See above: The accrued wages entry may be avoided where the amount involved is immaterial. ([CG-MCE-050#S08](#s-CG-MCE-050-S08))
- See above: Some unpaid wages at the end of an accounting period are quite common, and the expense should be accrued if it is material. ([CG-MCE-050#S09](#s-CG-MCE-050-S09))
- See above: The article states that the accrued salaries concept is used only in businesses on the accrual basis of accounting, under which expenses are recognized as incurred, and is not used under the cash basis. ([CG-MCE-050#S10](#s-CG-MCE-050-S10))
_Partly established. Established: the basis on which an accrual may be omitted as immaterial (S07, S08); the basis on which an accrual may be omitted as inapplicable to the basis of accounting used (S10). Missing: what must be documented to support that judgment._
## Finding the earned but unpaid portion
- A wage accrual is described as a journal entry whose purpose is to recognise the portion of wages that is unpaid at the end of a reporting period. _(jurisdiction: United States, entity_scope: Employers preparing periodic financial statements that have unpaid wages at a period end, accounting_basis: accrual basis)_ `CG-MCE-050#S11`
> “A wage accrual is a journal entry to recognize the unpaid portion of wages at the end of a reporting period.” — [AccountingTools, Inc. (author Steven Bragg) — Wage accrual definition](https://www.accountingtools.com/articles/wage-accrual), 2026-06-09; Section “What is a Wage Accrual?”, first sentence (TEXT.txt line 84). Verified 2026-09-09.
- The article states that the information for the wage accrual entry is most easily derived from a spreadsheet itemising each employee to whom the calculation applies, the amount of unpaid time, and that person’s standard pay rate; it is offered as the easiest source of the information rather than as the only permissible basis. _(jurisdiction: United States, entity_scope: Employers computing a wage accrual for employees with unpaid time at period end, accounting_basis: accrual basis, conditions: hedged as ‘most easily derived’, not the sole method)_ `CG-MCE-050#S12`
> “The information for the wage accrual entry is most easily derived from a spreadsheet that itemizes all employees to whom the calculation applies, the amount of unpaid time, and the standard pay rate for each person.” — [AccountingTools, Inc. (author Steven Bragg) — Wage accrual definition](https://www.accountingtools.com/articles/wage-accrual), 2026-06-09; Section “Example of a Wage Accrual”, paragraph following the sample journal entry (TEXT.txt line 87). Verified 2026-09-09.
- In the article's worked example, an employee on a fixed salary of $10,000 per month paid on the 25th of the month is owed five days of pay at month-end, which the article states is 16.6% of his full-month salary; the example illustrates apportioning a fixed monthly salary for the part of the period falling after the pay date, and is presented as an illustration rather than as a required method. _(jurisdiction: US — publisher is a US accounting CPE provider (site carries State CPE Requirements); the article itself names no other jurisdiction, entity_scope: Illustrative single employee paid a fixed monthly salary, accounting_basis: Accrual basis, conditions: Worked example only; Salary of $10,000 per month paid on the 25th of the month; Measurement at month-end; Five days of pay unpaid at month-end)_ `CG-MCE-050#S13`
> “Mr. Jones is paid a salary of $10,000 per month, which is paid on the 25th of the month. As of the end of the month, the employer of Mr. Jones owes him five days of pay, which is 16.6% of his full-month salary.” — [AccountingTools, Inc. (author Steven Bragg) — Accrued salaries definition](https://www.accountingtools.com/articles/accrued-salaries), 2026-05-15; Section "Example of Accrued Salaries", first and second sentences. Verified 2026-09-09.
- The article states that accrued salaries are estimates of compensation earned but not yet recorded or paid at period-end. _(jurisdiction: US — publisher is a US accounting CPE provider (site carries State CPE Requirements); the article itself names no other jurisdiction, entity_scope: Businesses generally, accounting_basis: Accrual basis, conditions: Measurement at period-end)_ `CG-MCE-050#S14`
> “Accrued salaries are estimates of compensation earned but not yet recorded or paid at period-end.” — [AccountingTools, Inc. (author Steven Bragg) — Accrued salaries definition](https://www.accountingtools.com/articles/accrued-salaries), 2026-05-15; Section "Accrued Salaries FAQs", question "How do accrued salaries differ from salaries payable?", first sentence. Verified 2026-09-09.
_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._
## Measuring the portion from the payroll records you have at the closing date
- See above: A wage accrual is described as a journal entry whose purpose is to recognise the portion of wages that is unpaid at the end of a reporting period. ([CG-MCE-050#S11](#s-CG-MCE-050-S11))
- See above: The article states that the information for the wage accrual entry is most easily derived from a spreadsheet itemising each employee to whom the calculation applies, the amount of unpaid time, and that person’s standard pay rate; it is offered as the easiest source of the information rather than as the only permissible basis. ([CG-MCE-050#S12](#s-CG-MCE-050-S12))
- See above: In the article's worked example, an employee on a fixed salary of $10,000 per month paid on the 25th of the month is owed five days of pay at month-end, which the article states is 16.6% of his full-month salary; the example illustrates apportioning a fixed monthly salary for the part of the period falling after the pay date, and is presented as an illustration rather than as a required method. ([CG-MCE-050#S13](#s-CG-MCE-050-S13))
- See above: The article states that accrued salaries are estimates of compensation earned but not yet recorded or paid at period-end. ([CG-MCE-050#S14](#s-CG-MCE-050-S14))
_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._
## What goes into the accrual besides the wages themselves
- The payroll accrual entry is simpler than the comprehensive payroll entry because payroll taxes are typically clumped into a single expense account and an offsetting liability account. _(jurisdiction: United States (article is written to the US tax regime — refers to the IRS and to 401(k) plans), entity_scope: Employers that run a payroll for employees)_ `CG-MCE-050#S15`
> “The accrual entry, as shown next, is simpler than the comprehensive payroll entry already shown, because you typically clump all payroll taxes into a single expense account and offsetting liability account.” — [AccountingTools, Inc. (Steven Bragg) — Payroll journal entries](https://www.accountingtools.com/articles/payroll-entries), 2026-03-04; Section "Accrued Payroll Journal Entry", second sentence. Verified 2026-09-09.
- The direct cost of factory labor includes the direct wages paid to employees and all other payroll costs associated with that labor; typically that means wages plus the payroll taxes and fringe benefits directly tied to those wages. The textbook says “typically” and does not close the list. _(jurisdiction: United States, entity_scope: manufacturing entities using a job order cost system, as described in an introductory managerial accounting textbook, accounting_basis: managerial cost accounting under a job order cost system (as presented in the textbook), conditions: direct factory labor)_ `CG-MCE-050#S16`
> “The direct cost of factory labor includes the direct wages paid to the employees and all other payroll costs associated with that labor. Typically, this includes wages and the payroll taxes and fringe benefits directly tied to those wages.” — [OpenStax, Rice University — Principles of Accounting, Volume 2: Managerial Accounting — 4.7 Prepare Journal Entries for a Job Order Cost System](https://openstax.org/books/principles-managerial-accounting/pages/4-7-prepare-journal-entries-for-a-job-order-cost-system), 2026-04-23; Section 4.7 “Prepare Journal Entries for a Job Order Cost System”, subsection “Journal Entries to Move Direct Materials, Direct Labor, and Overhead into Work in Process”, paragraph beginning “The direct cost of factory labor…”. Verified 2026-09-09.
_Not established from an authoritative source._
_Required authority: authoritative professional or accounting standard, primary regulator or government. Highest achieved: high quality professional secondary reference._
## Employer-borne payroll costs that accrue with the wages
- See above: The payroll accrual entry is simpler than the comprehensive payroll entry because payroll taxes are typically clumped into a single expense account and an offsetting liability account. ([CG-MCE-050#S15](#s-CG-MCE-050-S15))
- See above: The direct cost of factory labor includes the direct wages paid to employees and all other payroll costs associated with that labor; typically that means wages plus the payroll taxes and fringe benefits directly tied to those wages. The textbook says “typically” and does not close the list. ([CG-MCE-050#S16](#s-CG-MCE-050-S16))
_Not established from an authoritative source._
_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._
## Costs the employer bears itself versus amounts withheld from employees
_Not established from an authoritative source._
## Which account holds the accrual
- See above: The payroll accrual entry is simpler than the comprehensive payroll entry because payroll taxes are typically clumped into a single expense account and an offsetting liability account. ([CG-MCE-050#S15](#s-CG-MCE-050-S15))
- The article states that salaries payable is the liability for wages already recorded and owed, often arising after payroll has been processed. _(jurisdiction: US — publisher is a US accounting CPE provider (site carries State CPE Requirements); the article itself names no other jurisdiction, entity_scope: Businesses generally, accounting_basis: Accrual basis)_ `CG-MCE-050#S18`
> “Salaries payable is the liability for wages already recorded and owed, often after payroll has been processed.” — [AccountingTools, Inc. (author Steven Bragg) — Accrued salaries definition](https://www.accountingtools.com/articles/accrued-salaries), 2026-05-15; Section "Accrued Salaries FAQs", question "How do accrued salaries differ from salaries payable?", second sentence. Verified 2026-09-09.
_Not established from an authoritative source._
_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._
## Where the accrual sits and how it comes off the books
- See above: The payroll accrual entry is simpler than the comprehensive payroll entry because payroll taxes are typically clumped into a single expense account and an offsetting liability account. ([CG-MCE-050#S15](#s-CG-MCE-050-S15))
- The accrued wages entry is reversed in the following accounting period so that the initial payroll recordation entry takes its place. _(jurisdiction: United States (article is written to the US tax regime — refers to the IRS and to 401(k) plans), entity_scope: Employers that run a payroll for employees)_ `CG-MCE-050#S19`
> “This entry is then reversed in the following accounting period, so that the initial recordation entry can take its place.” — [AccountingTools, Inc. (Steven Bragg) — Payroll journal entries](https://www.accountingtools.com/articles/payroll-entries), 2026-03-04; Section "Accrued Wages Entry", second sentence. Verified 2026-09-09.
- After the accrual entry is recorded, it should be reversed at the beginning of the following accounting period, and the actual payroll expense should then be recorded when it occurs using the primary payroll journal entry. _(jurisdiction: United States (article is written to the US tax regime — refers to the IRS and to 401(k) plans), entity_scope: Employers that run a payroll for employees)_ `CG-MCE-050#S20`
> “After recording this entry, reverse it at the beginning of the following accounting period, and then record the actual payroll expense (as just described under the "Primary Payroll Journal Entry" section whenever it occurs.” — [AccountingTools, Inc. (Steven Bragg) — Payroll journal entries](https://www.accountingtools.com/articles/payroll-entries), 2026-03-04; Section "Accrued Payroll Journal Entry", third sentence. Verified 2026-09-09.
- Derecognition is the process of removing an item from a reporting entity's financial statements as an asset, liability or equity, and it should occur when the item no longer meets any one of the recognition criteria in paragraph RD5. _(jurisdiction: United States, entity_scope: reporting entities preparing general purpose financial statements, accounting_basis: FASB conceptual framework for financial reporting (concepts used by the Board in setting standards); this Concepts Statement does not itself establish GAAP, effective_from: 2023-08)_ `CG-MCE-050#S21`
> “RD13. Derecognition is the process of removing an item from financial statements
of a reporting entity as an asset, liability, or equity. Derecognition should occur
when an item no longer meets any one of the recognition criteria in paragraph
RD5.” — [Financial Accounting Standards Board of the Financial Accounting Foundation — Statement of Financial Accounting Concepts No. 8, Conceptual Framework for Financial Reporting — Chapter 5, Recognition and Derecognition](https://storage.fasb.org/Concepts%20Statement%208%E2%80%94Chapter%205%E2%80%94Recognition%20and%20Derecognition.pdf), 2023-08; Chapter 5 — Derecognition — paragraph RD13 (TEXT.txt lines 163–166). Verified 2026-09-09.
_Partly established. Established: reversal at the start of the following period as an accepted mechanism for clearing an accrual (S19, S20). Missing: direct relief against the actual transaction as an accepted mechanism for clearing an accrual; the conditions each clearing mechanism requires; where the accrual is carried in the meantime, including which liability account carries it; whether the accrual must be held apart from the obligation accounts used for employee withholdings and for the remittances owed on them._
_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._
## Reverse it next period, or relieve it against the actual run?
- See above: The accrued wages entry is reversed in the following accounting period so that the initial payroll recordation entry takes its place. ([CG-MCE-050#S19](#s-CG-MCE-050-S19))
- See above: After the accrual entry is recorded, it should be reversed at the beginning of the following accounting period, and the actual payroll expense should then be recorded when it occurs using the primary payroll journal entry. ([CG-MCE-050#S20](#s-CG-MCE-050-S20))
- The article states that, in practice, accrued salaries may become part of salaries payable once the payroll amount is finalized. _(jurisdiction: US — publisher is a US accounting CPE provider (site carries State CPE Requirements); the article itself names no other jurisdiction, entity_scope: Businesses generally, accounting_basis: Accrual basis, conditions: Once the payroll amount is finalized)_ `CG-MCE-050#S22`
> “In practice, accrued salaries may become part of salaries payable once the payroll amount is finalized.” — [AccountingTools, Inc. (author Steven Bragg) — Accrued salaries definition](https://www.accountingtools.com/articles/accrued-salaries), 2026-05-15; Section "Accrued Salaries FAQs", question "How do accrued salaries differ from salaries payable?", third sentence. Verified 2026-09-09.
- In Sage 50, reversing entries are optional and relate to bookkeeping technique. _(jurisdiction: United States (Sage 50 U.S. product edition; en-us help site), entity_scope: Users of the Sage 50 U.S. desktop product entering General Journal entries, platform: Sage 50 (U.S. edition), platform_edition: 2026 help edition (page lists Version: 2026 | 2024 | 2023; Published: June 17, 2026))_ `CG-MCE-050#S32`
> “Reversing entries are optional and relate to bookkeeping technique.” — [The Sage Group plc (Sage 50 U.S. product help) — Enter a Reversing General Journal Entry](https://help-sage50.na.sage.com/en-us/2026/Content/Banking_General_Ledger/General_Journal/Enter_a_reversing_General_Journal_entry.htm), 2026-06-17; Enter a Reversing General Journal Entry - Body, introduction, paragraph 2 (first sentence) (TEXT.txt line 28). Verified 2026-09-09.
_Partly established. Established: a reversing entry at the start of the following period as a clearing mechanism (S19, S20). Missing: relieving the accrual when the actual run posts as a clearing mechanism; the criteria for choosing between the clearing mechanisms; what each clearing mechanism depends on being done reliably._
_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation._
## How next period's payroll entry meets the accrual
- See above: The accrued wages entry is reversed in the following accounting period so that the initial payroll recordation entry takes its place. ([CG-MCE-050#S19](#s-CG-MCE-050-S19))
- See above: After the accrual entry is recorded, it should be reversed at the beginning of the following accounting period, and the actual payroll expense should then be recorded when it occurs using the primary payroll journal entry. ([CG-MCE-050#S20](#s-CG-MCE-050-S20))
- See above: The article states that, in practice, accrued salaries may become part of salaries payable once the payroll amount is finalized. ([CG-MCE-050#S22](#s-CG-MCE-050-S22))
- The help offers as an illustrative example that a user may want to include payroll tax liabilities in December but enter the paycheck itself in January; it is presented as an example, not as a requirement. _(jurisdiction: United States (Sage 50 U.S. product edition; en-us help site), entity_scope: Users of the Sage 50 U.S. desktop product entering General Journal entries, platform: Sage 50 (U.S. edition), platform_edition: 2026 help edition (page lists Version: 2026 | 2024 | 2023; Published: June 17, 2026))_ `CG-MCE-050#S33`
> “For
example, you may want to include payroll tax liabilities in December but
enter the paycheck itself in January.” — [The Sage Group plc (Sage 50 U.S. product help) — Enter a Reversing General Journal Entry](https://help-sage50.na.sage.com/en-us/2026/Content/Banking_General_Ledger/General_Journal/Enter_a_reversing_General_Journal_entry.htm), 2026-06-17; Enter a Reversing General Journal Entry - Body, introduction, paragraph 2 (closing example sentence) (TEXT.txt lines 30-32). Verified 2026-09-09.
_Not established from an authoritative source._
_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._
## When the actual pay differs from what you accrued
- See above: The Board concluded that the phrase 'sufficient reliability' should be removed from the measurability criterion, and that an item meeting the definition of an element should be recognized when it can be measured with a relevant measurement attribute and faithfully represented through depiction and measurement, although the degree of measurement uncertainty may affect the decision usefulness of the information. ([CG-MCE-050#S06](#s-CG-MCE-050-S06))
- See above: Derecognition is the process of removing an item from a reporting entity's financial statements as an asset, liability or equity, and it should occur when the item no longer meets any one of the recognition criteria in paragraph RD5. ([CG-MCE-050#S21](#s-CG-MCE-050-S21))
- For an asset or a liability, recognition covers recording the acquisition or incurrence of the item and also its later changes related to measurement, including changes that result in the item's removal from the financial statements. _(jurisdiction: United States, entity_scope: reporting entities preparing general purpose financial statements, accounting_basis: FASB conceptual framework for financial reporting (concepts used by the Board in setting standards); this Concepts Statement does not itself establish GAAP, effective_from: 2023-08)_ `CG-MCE-050#S23`
> “For an
asset or a liability, recognition involves recording the acquisition or incurrence of
the item and later changes in the item (related to measurement), including changes
that result in its removal from financial statements (as addressed in paragraphs
RD13 and RD14).” — [Financial Accounting Standards Board of the Financial Accounting Foundation — Statement of Financial Accounting Concepts No. 8, Conceptual Framework for Financial Reporting — Chapter 5, Recognition and Derecognition](https://storage.fasb.org/Concepts%20Statement%208%E2%80%94Chapter%205%E2%80%94Recognition%20and%20Derecognition.pdf), 2023-08; Chapter 5 — Recognition — paragraph RD3 (TEXT.txt lines 79–83). Verified 2026-09-09.
- The degree of measurement uncertainty may affect the decision usefulness of financial information, but an item with measurement uncertainty may still provide decision-useful information through confirmatory or predictive value, and its measurement can be faithfully represented if the measurement process is complete, neutral and free from error; disclosures may be necessary about measurement uncertainty. _(jurisdiction: United States, entity_scope: reporting entities preparing general purpose financial statements, accounting_basis: FASB conceptual framework for financial reporting (concepts used by the Board in setting standards); this Concepts Statement does not itself establish GAAP, effective_from: 2023-08, conditions: addresses measurement uncertainty generally; the document does not address any specific class of estimate)_ `CG-MCE-050#S24`
> “RD10. The decision usefulness of financial information may be affected by the
degree of measurement uncertainty. However, an item that has measurement
uncertainty may still provide decision-useful financial information to resource
providers through confirmatory value or predictive value. Furthermore, the
measurement of that item can be faithfully represented if the measurement
process is (a) complete, (b) neutral, and (c) free from error. Disclosures may be
necessary to provide information about measurement uncertainty.” — [Financial Accounting Standards Board of the Financial Accounting Foundation — Statement of Financial Accounting Concepts No. 8, Conceptual Framework for Financial Reporting — Chapter 5, Recognition and Derecognition](https://storage.fasb.org/Concepts%20Statement%208%E2%80%94Chapter%205%E2%80%94Recognition%20and%20Derecognition.pdf), 2023-08; Chapter 5 — Measurability — paragraph RD10 (TEXT.txt lines 137–143). Verified 2026-09-09.
- Concepts Statement 5 states that initial recognition of assets acquired and liabilities incurred generally involves measurement based on current exchange prices at the date of recognition, and that once recognized an asset or liability continues to be measured at the amount initially recognized until an event that changes the asset or liability or its amount occurs and meets the recognition criteria. _(jurisdiction: United States, entity_scope: business enterprises (Concepts Statement 5 is titled 'Recognition and Measurement in Financial Statements of Business Enterprises'), accounting_basis: FASB conceptual framework (Concepts Statement 5, December 1984), reproduced in Appendix B of this chapter marked to show superseded text, effective_from: 1984-12, conditions: quote is from Appendix B, which reproduces FASB Concepts Statement No. 5 (December 1984) 'Marked to Show Superseded Text'; paragraph B1 states that the outlined text is superseded by this chapter and that superseded text is left in the document for context, but the outlining/grey highlighting is not preserved in the pinned plain text, so whether this particular paragraph is superseded cannot be determined from TEXT.txt)_ `CG-MCE-050#S25`
> “88. Initial recognition of assets acquired and liabilities incurred generally involves
measurement based on current exchange prices at the date of recognition. Once
an asset or a liability is recognized, it continues to be measured at the amount
initially recognized until an event that changes the asset or liability or its amount
occurs and meets the recognition criteria.” — [Financial Accounting Standards Board of the Financial Accounting Foundation — Statement of Financial Accounting Concepts No. 8, Conceptual Framework for Financial Reporting — Chapter 5, Recognition and Derecognition](https://storage.fasb.org/Concepts%20Statement%208%E2%80%94Chapter%205%E2%80%94Recognition%20and%20Derecognition.pdf), 2023-08; Appendix B — Concepts Statement 5, 'Recognition of Changes in Assets and Liabilities', paragraph 88 (printed pages 43–44; TEXT.txt lines 2169–2173). Verified 2026-09-09.
_Partly established. Established: what happens when the actual amount differs from the estimate (S19, S20). Missing: where that difference is absorbed._
_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._
## Doing it in your accounting system
- The article presents the reversal steps as the route for allocating a transaction between two accounting periods or fixing a debit and credit error, and states that reversing simply reverses the debits and credits and does not delete the original journal entry. _(jurisdiction: United States (QuickBooks Online US edition; article published on the US en-US QuickBooks support site), entity_scope: Businesses and users working in QuickBooks Online (the QuickBooks products the article lists), platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, QuickBooks Online Plus, QuickBooks Online Simple Start, QuickBooks Online Essentials, QuickBooks Ledger, Intuit Enterprise Suite, QuickBooks Online Free, QuickBooks Online Lite, QuickBooks Solopreneur Plus (the products the article lists itself as applying to))_ `CG-MCE-050#S26`
> “If you need to allocate a transaction between two accounting periods or fix a debit and credit error, follow these steps. This simply reverses the debits and credits - it doesn't delete the original journal entry:” — [Intuit Inc. — Reverse or delete a journal entry](https://quickbooks.intuit.com/learn-support/en-us/help-article/journal-entries/reverse-delete-journal-entry-quickbooks-online/L2prlrnkh_US_en_US), 2026-08-05; Section “Reverse a journal entry” — lead-in sentence introducing the step list. Verified 2026-09-09.
- When a user reverses a journal entry, QuickBooks creates a new journal entry to balance it as a record of the change, and that new entry has slightly different information from the original. _(jurisdiction: United States (QuickBooks Online US edition; article published on the US en-US QuickBooks support site), entity_scope: Businesses and users working in QuickBooks Online (the QuickBooks products the article lists), platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, QuickBooks Online Plus, QuickBooks Online Simple Start, QuickBooks Online Essentials, QuickBooks Ledger, Intuit Enterprise Suite, QuickBooks Online Free, QuickBooks Online Lite, QuickBooks Solopreneur Plus (the products the article lists itself as applying to), conditions: after the user reverses a journal entry)_ `CG-MCE-050#S27`
> “When you reverse a journal entry, QuickBooks creates a new journal entry to balance it. This is a record of the change you made. It has slightly different information:” — [Intuit Inc. — Reverse or delete a journal entry](https://quickbooks.intuit.com/learn-support/en-us/help-article/journal-entries/reverse-delete-journal-entry-quickbooks-online/L2prlrnkh_US_en_US), 2026-08-05; Section “Reverse a journal entry” — paragraph immediately after the step list, introducing the bulleted list. Verified 2026-09-09.
- The reversing journal entry QuickBooks creates keeps the original journal number and adds the letter “R”, which the article says means it is reconciled. _(jurisdiction: United States (QuickBooks Online US edition; article published on the US en-US QuickBooks support site), entity_scope: Businesses and users working in QuickBooks Online (the QuickBooks products the article lists), platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, QuickBooks Online Plus, QuickBooks Online Simple Start, QuickBooks Online Essentials, QuickBooks Ledger, Intuit Enterprise Suite, QuickBooks Online Free, QuickBooks Online Lite, QuickBooks Solopreneur Plus (the products the article lists itself as applying to), conditions: after the user reverses a journal entry)_ `CG-MCE-050#S28`
> “The new journal entry keeps the original journal no. and adds the letter "R". This means it's reconciled.” — [Intuit Inc. — Reverse or delete a journal entry](https://quickbooks.intuit.com/learn-support/en-us/help-article/journal-entries/reverse-delete-journal-entry-quickbooks-online/L2prlrnkh_US_en_US), 2026-08-05; Section “Reverse a journal entry” — bulleted list after the step list, first bullet. Verified 2026-09-09.
- The reversing journal entry QuickBooks creates is dated the first day of the month following the original journal entry’s date. _(jurisdiction: United States (QuickBooks Online US edition; article published on the US en-US QuickBooks support site), entity_scope: Businesses and users working in QuickBooks Online (the QuickBooks products the article lists), platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, QuickBooks Online Plus, QuickBooks Online Simple Start, QuickBooks Online Essentials, QuickBooks Ledger, Intuit Enterprise Suite, QuickBooks Online Free, QuickBooks Online Lite, QuickBooks Solopreneur Plus (the products the article lists itself as applying to), conditions: after the user reverses a journal entry)_ `CG-MCE-050#S29`
> “The new journal entry is dated the first day of the month following the original journal entry date.” — [Intuit Inc. — Reverse or delete a journal entry](https://quickbooks.intuit.com/learn-support/en-us/help-article/journal-entries/reverse-delete-journal-entry-quickbooks-online/L2prlrnkh_US_en_US), 2026-08-05; Section “Reverse a journal entry” — bulleted list after the step list, second bullet. Verified 2026-09-09.
- Intuit advises that a QuickBooks Online user should create journal entries only as a last resort or with the help of their accountant. _(jurisdiction: United States (QuickBooks Online US edition; article published on the US en-US QuickBooks support site), entity_scope: Businesses and users working in QuickBooks Online (the QuickBooks products the article lists), platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, QuickBooks Online Plus, QuickBooks Online Simple Start, QuickBooks Online Essentials, QuickBooks Ledger, Intuit Enterprise Suite, QuickBooks Online Free, QuickBooks Online Lite, QuickBooks Solopreneur Plus (the products the article lists itself as applying to))_ `CG-MCE-050#S30`
> “You should only create journal entries as a last resort or with the help of your accountant.” — [Intuit Inc. — Reverse or delete a journal entry](https://quickbooks.intuit.com/learn-support/en-us/help-article/journal-entries/reverse-delete-journal-entry-quickbooks-online/L2prlrnkh_US_en_US), 2026-08-05; Article “Reverse or delete a journal entry” — introductory paragraph before the “Reverse a journal entry” heading. Verified 2026-09-09.
- Selecting the Reverse check box in the General Journal Entry window causes the transaction to be automatically reversed on the first day of the next accounting period. _(jurisdiction: United States (Sage 50 U.S. product edition; en-us help site), entity_scope: Users of the Sage 50 U.S. desktop product entering General Journal entries, platform: Sage 50 (U.S. edition), platform_edition: 2026 help edition (page lists Version: 2026 | 2024 | 2023; Published: June 17, 2026), conditions: the Reverse check box is selected)_ `CG-MCE-050#S31`
> “Select the Reverse check
box to have the transaction automatically reversed the first day of the
next accounting period.” — [The Sage Group plc (Sage 50 U.S. product help) — Enter a Reversing General Journal Entry](https://help-sage50.na.sage.com/en-us/2026/Content/Banking_General_Ledger/General_Journal/Enter_a_reversing_General_Journal_entry.htm), 2026-06-17; Enter a Reversing General Journal Entry - Procedure, step 3 ('Select the Reverse check box...') (TEXT.txt lines 44-46). Verified 2026-09-09.
- See above: In Sage 50, reversing entries are optional and relate to bookkeeping technique. ([CG-MCE-050#S32](#s-CG-MCE-050-S32))
- See above: The help offers as an illustrative example that a user may want to include payroll tax liabilities in December but enter the paycheck itself in January; it is presented as an example, not as a requirement. ([CG-MCE-050#S33](#s-CG-MCE-050-S33))
- A user cannot access or edit the reversing entry that Sage 50 generates. _(jurisdiction: United States (Sage 50 U.S. product edition; en-us help site), entity_scope: Users of the Sage 50 U.S. desktop product entering General Journal entries, platform: Sage 50 (U.S. edition), platform_edition: 2026 help edition (page lists Version: 2026 | 2024 | 2023; Published: June 17, 2026))_ `CG-MCE-050#S35`
> “Note: You cannot access or
edit the reversing entry that Sage 50 generates.” — [The Sage Group plc (Sage 50 U.S. product help) — Enter a Reversing General Journal Entry](https://help-sage50.na.sage.com/en-us/2026/Content/Banking_General_Ledger/General_Journal/Enter_a_reversing_General_Journal_entry.htm), 2026-06-17; Enter a Reversing General Journal Entry - Body, 'Note:' immediately following the introduction (first sentence) (TEXT.txt lines 33-34). Verified 2026-09-09.
_Partly established. Established: how the accounting system, where supported, automatically reverses the entry (S26, S27, S29, S31). Missing: how the accounting system creates the entry; how the accounting system dates the entry; what the reader must verify afterwards._
## How the system creates, dates and reverses the entry — and how you check it happened
- See above: The article presents the reversal steps as the route for allocating a transaction between two accounting periods or fixing a debit and credit error, and states that reversing simply reverses the debits and credits and does not delete the original journal entry. ([CG-MCE-050#S26](#s-CG-MCE-050-S26))
- See above: When a user reverses a journal entry, QuickBooks creates a new journal entry to balance it as a record of the change, and that new entry has slightly different information from the original. ([CG-MCE-050#S27](#s-CG-MCE-050-S27))
- See above: The reversing journal entry QuickBooks creates keeps the original journal number and adds the letter “R”, which the article says means it is reconciled. ([CG-MCE-050#S28](#s-CG-MCE-050-S28))
- See above: The reversing journal entry QuickBooks creates is dated the first day of the month following the original journal entry’s date. ([CG-MCE-050#S29](#s-CG-MCE-050-S29))
- See above: Selecting the Reverse check box in the General Journal Entry window causes the transaction to be automatically reversed on the first day of the next accounting period. ([CG-MCE-050#S31](#s-CG-MCE-050-S31))
- See above: In Sage 50, reversing entries are optional and relate to bookkeeping technique. ([CG-MCE-050#S32](#s-CG-MCE-050-S32))
- See above: The help offers as an illustrative example that a user may want to include payroll tax liabilities in December but enter the paycheck itself in January; it is presented as an example, not as a requirement. ([CG-MCE-050#S33](#s-CG-MCE-050-S33))
- See above: A user cannot access or edit the reversing entry that Sage 50 generates. ([CG-MCE-050#S35](#s-CG-MCE-050-S35))
_Not established from an authoritative source._
## Writing it down so someone else can reproduce it
- See above: The article states that the information for the wage accrual entry is most easily derived from a spreadsheet itemising each employee to whom the calculation applies, the amount of unpaid time, and that person’s standard pay rate; it is offered as the easiest source of the information rather than as the only permissible basis. ([CG-MCE-050#S12](#s-CG-MCE-050-S12))
- In her dissent, Ms. Botosan quotes Chapter 3 (paragraph QC16) as stating that an estimate can be a faithful representation if the reporting entity has applied an appropriate process properly, described the estimate properly, and explained any uncertainties that significantly affect it. _(jurisdiction: United States, entity_scope: reporting entities preparing general purpose financial statements, accounting_basis: FASB conceptual framework for financial reporting (concepts used by the Board in setting standards); this Concepts Statement does not itself establish GAAP, effective_from: 2023-08, conditions: appears inside a dissenting Board member's statement, quoting Chapter 3 of the Concepts Statement, which is not part of this pinned document)_ `CG-MCE-050#S36`
> “Furthermore, an estimate “can be a faithful
representation if the reporting entity has applied properly an appropriate process,
described properly the estimate, and explained any uncertainties that significantly
affect the estimate” (paragraph QC16). Thus, a fair value estimate is deemed to” — [Financial Accounting Standards Board of the Financial Accounting Foundation — Statement of Financial Accounting Concepts No. 8, Conceptual Framework for Financial Reporting — Chapter 5, Recognition and Derecognition](https://storage.fasb.org/Concepts%20Statement%208%E2%80%94Chapter%205%E2%80%94Recognition%20and%20Derecognition.pdf), 2023-08; Chapter 5 — dissent of Ms. Botosan (following paragraph RD14), quoting Chapter 3, paragraph QC16 (TEXT.txt lines 244–247). Verified 2026-09-09.
- The article puts forward as a best practice that the wage accrual journal entry be set up within a standardised journal entry template so the same account numbers are used consistently each reporting period, since otherwise there is a risk of using different accounts in different periods. _(jurisdiction: United States, entity_scope: Employers recording a recurring wage accrual entry, accounting_basis: accrual basis, conditions: stated as a best practice)_ `CG-MCE-050#S37`
> “Another best practice is to set up the wage accrual journal entry within a standardized journal entry template, so that you can consistently use the same account numbers in each reporting period; otherwise, there is a risk that you will use different accounts in different periods.” — [AccountingTools, Inc. (author Steven Bragg) — Wage accrual definition](https://www.accountingtools.com/articles/wage-accrual), 2026-06-09; Section “Wage Accrual Best Practices”, second sentence (TEXT.txt line 89). Verified 2026-09-09.
_Not established from an authoritative source._
_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation._
## Support for the estimate, and using the same method every period
- See above: The article states that the information for the wage accrual entry is most easily derived from a spreadsheet itemising each employee to whom the calculation applies, the amount of unpaid time, and that person’s standard pay rate; it is offered as the easiest source of the information rather than as the only permissible basis. ([CG-MCE-050#S12](#s-CG-MCE-050-S12))
- See above: In her dissent, Ms. Botosan quotes Chapter 3 (paragraph QC16) as stating that an estimate can be a faithful representation if the reporting entity has applied an appropriate process properly, described the estimate properly, and explained any uncertainties that significantly affect it. ([CG-MCE-050#S36](#s-CG-MCE-050-S36))
- See above: The article puts forward as a best practice that the wage accrual journal entry be set up within a standardised journal entry template so the same account numbers are used consistently each reporting period, since otherwise there is a risk of using different accounts in different periods. ([CG-MCE-050#S37](#s-CG-MCE-050-S37))
_Not established from an authoritative source._
_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation._
## Splitting the accrual across jobs, departments and locations
- See above: The direct cost of factory labor includes the direct wages paid to employees and all other payroll costs associated with that labor; typically that means wages plus the payroll taxes and fringe benefits directly tied to those wages. The textbook says “typically” and does not close the list. ([CG-MCE-050#S16](#s-CG-MCE-050-S16))
- The accounting system needs to keep track of the labor and the other related payroll expenses assigned to a particular job; those records are typically kept in a time ticket that employees submit daily. The textbook hedges the record medium and frequency with “typically”. _(jurisdiction: United States, entity_scope: manufacturing entities using a job order cost system, as described in an introductory managerial accounting textbook, accounting_basis: managerial cost accounting under a job order cost system (as presented in the textbook), conditions: direct factory labor assigned to a particular job)_ `CG-MCE-050#S38`
> “The accounting system needs to keep track of the labor and the other related expenses assigned to a particular job. These records are typically kept in a time ticket submitted by employees daily.” — [OpenStax, Rice University — Principles of Accounting, Volume 2: Managerial Accounting — 4.7 Prepare Journal Entries for a Job Order Cost System](https://openstax.org/books/principles-managerial-accounting/pages/4-7-prepare-journal-entries-for-a-job-order-cost-system), 2026-04-23; Section 4.7 “Prepare Journal Entries for a Job Order Cost System”, subsection “Journal Entries to Move Direct Materials, Direct Labor, and Overhead into Work in Process”, paragraph beginning “The direct cost of factory labor…”. Verified 2026-09-09.
- Indirect labor is recorded with the debit to manufacturing overhead and the credit to factory wages payable; that recording of the debit side is what distinguishes it from direct labor. The document states this contrast and does not say what the direct-labor debit is in this sentence. _(jurisdiction: United States, entity_scope: manufacturing entities using a job order cost system, as described in an introductory managerial accounting textbook, accounting_basis: managerial cost accounting under a job order cost system (as presented in the textbook), conditions: indirect labor; job order cost system journal entries)_ `CG-MCE-050#S39`
> “The difference between direct labor and indirect labor is that the indirect labor records the debit to manufacturing overhead while the credit is to factory wages payable.” — [OpenStax, Rice University — Principles of Accounting, Volume 2: Managerial Accounting — 4.7 Prepare Journal Entries for a Job Order Cost System](https://openstax.org/books/principles-managerial-accounting/pages/4-7-prepare-journal-entries-for-a-job-order-cost-system), 2026-04-23; Section 4.7 “Prepare Journal Entries for a Job Order Cost System”, subsection “Journal Entries to Move Direct Materials, Direct Labor, and Overhead into Work in Process”, paragraph beginning “Indirect labor records…”. Verified 2026-09-09.
_Not established from an authoritative source._
_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._
## Whether the accrual must carry the same job and department attributions as ordinary wage cost
- See above: The direct cost of factory labor includes the direct wages paid to employees and all other payroll costs associated with that labor; typically that means wages plus the payroll taxes and fringe benefits directly tied to those wages. The textbook says “typically” and does not close the list. ([CG-MCE-050#S16](#s-CG-MCE-050-S16))
- See above: The accounting system needs to keep track of the labor and the other related payroll expenses assigned to a particular job; those records are typically kept in a time ticket that employees submit daily. The textbook hedges the record medium and frequency with “typically”. ([CG-MCE-050#S38](#s-CG-MCE-050-S38))
- See above: Indirect labor is recorded with the debit to manufacturing overhead and the credit to factory wages payable; that recording of the debit side is what distinguishes it from direct labor. The document states this contrast and does not say what the direct-labor debit is in this sentence. ([CG-MCE-050#S39](#s-CG-MCE-050-S39))
_Not established from an authoritative source._
_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._
## Not yet fully established from an authoritative source
- Establish which employer-borne payroll costs accrue together with the wage obligation, and the relationship between accrued gross wages and the amounts withheld from them. _(not established; below the required authority class)_
- Establish the accepted mechanisms for clearing an accrual — reversal at the start of the following period and direct relief against the actual transaction — the conditions each requires, and where the accrual is carried in the meantime, including which liability account carries it and whether it must be held apart from the obligation accounts used for employee withholdings and for the remittances owed on them. _(partly established; below the required authority class)_
- Establish how mainstream small-business accounting systems create, date and automatically reverse an accrual entry, and how a reader verifies that the reversal actually occurred. _(not established)_
- Establish the basis on which an accrual may be omitted as immaterial or as inapplicable to the basis of accounting used, and what must be documented to support that judgment. _(partly established)_
- Establish the documentation and support expectation for an estimated period-end accrual so that its basis and computation can be reviewed and reproduced, so that the way the accrual was cleared can be reproduced from the same file, and establish the expectation that the estimation method is applied consistently from one period to the next. _(not established; below the required authority class)_
- Establish how the wage cost earned but unpaid at a period end is measured from the payroll records available at that date, for staff paid by the hour and for staff paid a fixed amount per pay period, including the accepted basis for apportioning a pay period that straddles the closing date when the run covering it has not yet been processed. _(established; below the required authority class)_
- Establish which payroll costs an employer bears itself on the wages it pays, as distinct from the amounts it withholds from employee pay and remits on the employee's behalf, so the answer can state whose obligation each component is before any of them is accrued. _(not established)_
- Establish whether accrued but unpaid wage cost must carry the same job, department and location attributions that the wage cost it represents ordinarily carries, and what a period's cost reports omit or misstate when an accrual is posted without them. _(not established; below the required authority class)_
- Establish the criterion that decides whether unpaid earned wages must be recognised in the period the work was performed, and how the reader applies it to their own books. _(partly established)_
- Establish when an accrual may properly be omitted on materiality or basis grounds, and what the reader must be able to show to support that decision. _(partly established)_
- Specify how the earned but unpaid portion is identified and computed from the payroll data available at the closing date, for staff paid by the hour and for staff paid a fixed amount. _(established; below the required authority class)_
- Determine which employer-borne payroll costs accrue with the wages, and establish that amounts withheld from employees are already inside the accrued gross rather than additions to it. _(not established; below the required authority class)_
- Determine which account carries the accrual and whether it must be kept apart from the obligation accounts used for withholdings and remittances. _(not established; below the required authority class)_
- Compare the clearing mechanisms — a reversing entry at the start of the following period against relieving the accrual when the actual run posts — and give the criteria for choosing, including what each depends on being done reliably. _(partly established; below the required authority class)_
- Show how the following period's payroll entry interacts with the accrual under each clearing mechanism, so that the expense appears once across the two periods. _(not established; below the required authority class)_
- Determine what happens when the actual amount differs from the estimate, and where that difference is absorbed. _(partly established; below the required authority class)_
- Specify how the accrual is documented so that its basis, its computation and its clearing can be reproduced by another person, and require the method to be applied consistently across periods. _(not established; below the required authority class)_
- Address allocating the accrual across the same job, department or location dimensions that ordinary wage cost carries. _(not established; below the required authority class)_
- Establish how the accounting system creates, dates and, where supported, automatically reverses the entry, and what the reader must verify afterwards. _(partly established)_
_Reference date 2026-09-07. Statements are quoted verbatim from their sources; scope and verification dates are shown on each._