Liz,
I just ran the chart for myself and indeed, it appears your Liabilities
are backwards. That is, if you owe money, they should have a Credit
balance, but yours show as Debit balance. (The *normal* balance of a
Liability account is Credit, not Debit)
What is your preference setting for Accounts > Reversed Balanced Accounts?
If it is "none" or "Income & Expense" then your Liability accounts will
show as negative amounts in the Accounts tab if they are a Credit balance.
If it is "Credit accounts" then they will show as positive on the CoA.
If your balances are opposite of that, then your balances are reversed.
(they are 'contra balances' from what is normally expected)
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As to your specific situational question:
I'm not real clear on your SX template. Can you provide it for
clarification? (no need for amounts, It's just to clear up which splits
you have as Debits & Credits)
From what I gather, this is a transaction to record money you pay as
wages (to yourself or others), the liability for taxes on those wages,
and super (??) payments. (not sure what that last part is)
I'm not quite understanding why that is all in one transaction. But I'll
take a guess, maybe my below examples will be roughly correct...
1. Payments of wages by a company to employees would simplistically be
something like:
Dr. Expenses:Labor
Cr. Cash
2. A (likely) separate transaction would record payroll tax liability
such as:
Dr. Expenses:Payroll Taxes
Cr. Liabilities:Payroll Taxes Due
(arguably, you can put this all in one transaction)
3. Then when you make the actual payment:
Dr. Liabilities:Payroll Taxes Due
Cr. Cash
Which reduces the previous liability incurred and recorded, by the
amount of your payment.
You'd repeat that second transaction for any adjustments you are advised
to make as you note, and then zero it out with another payment. (or
otherwise your 4th Quarter payment is simply larger)
-----
If the situation is concerning something like a 'self-employed' status
and you're making quarterly estimated income tax payments, the treatment
would generally be similar, just different terminology and/or account names.
-----
Now, in the case (which it appears you are dealing with) that you are
paying that tax liability at the same time as wages are disbursed, the
treatment is similar save that you can record the payment all at once
and *maybe* skip the intermediary step of 'Taxes Due' splits:
Dr. Expenses:Labor
Dr. Expenses:Payroll Taxes
Cr. Cash
You would still record the Liability of Taxes Due when you are provided
the adjustment you need to make, and then zero it out with the final
payment.
However, I'd bet good practice would be to record those Liability splits
regardless, just to show a trail that they were incurred, and then
covered, thus:
Dr. Expenses:Labor 100
Dr. Liabilities:Payroll Taxes Due 10
Dr. Expenses:Payroll Taxes 10
Cr. Liabilities:Payroll Taxes Due 10
Cr. Cash 110
(the Credit to Cash being equal to the first two Debits and splits 3 & 4
must be also equal to each other)
*Hopefully* the three middle splits are all equal, but if the Liability
as estimated is not fully paid for, or overpaid, the Debit to the 'Due'
account (split #2) would be less or more accordingly.
Regards,
Adrien
p.s.—that's how it would look on paper!
On 12/6/22 12:01 AM, Liz wrote:
On Tue, 6 Dec 2022 15:40:06 +1100
Chris Grinton <[email protected]> wrote:
The charts suggest that you have *negative* liabilities. That is,
while the underlying accounts may have a type of "Liability", the net
balance of these accounts is negative, so are effectively an asset.
For "normal" positive liabilities, the red bars in the chart would be
above the $0 line as per the attached screenshot.
Chris
I accept that there is likely a logical fault in my account setup.
I'm not sure how or where, certainly when I pay my tax out of the bank
account my liability for paying tax goes down.
So at the end of the month I enter a transaction by scheduled
transaction to list my wages, tax and super payments. That transaction
results in an increase in my Tax liability account, which when I pay up
a few weeks later, the liability decreases.
But what I have done, which I'm sure is my problem, is I haven't got
the tax payments going to the correct logical place but recursively I
have hurriedly filed them under tax liabilities.
So my liabilities in my books are increasing regularly instead of being
zeroed.
This payment is the amount which the tax people tell me I'm going to
pay to account for my company tax. They ask for 4 payments each year,
and then the accountant sorts out annually what else I have to pay.
So I think it comes to....
What are appropriate splits for the prepayment of my company tax? One
side is tax liabilities, and the other I can't work out.
No use Michael telling me that I need to decide what I would do on
paper, I'm lost.
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