Wednesday, April 21, 2010

Wages Payable Trial Balance

When the month end trial balance is done by a company's accountant , should the wages payable account be cleared to 0?

No, money in the wages payable account is owed to someone that is not the company, whether it be this period or next, the money must be paid.

Thus, the wage payables on the accounting ledger need to stay on the company's  books until you actually pay the vendors for the items or the employees their wages.

Only nominal accounts (expense and revenue accounts) are closed at the end of the accounting period. Real accounts (balance sheet accounts) are not closed since they are actually existing as of balance sheet date and will only be closed when required.

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