Wage control and HMRC ledgers replaced? (AAT)
Got an exam in a couple hours, I know i'm too late but thought I'd try, as my tutor isnt helping.
We have been taught about the wage control account, but then one of the questions in the practice assessment shows completely different ledger accounts that have seemingly replaced the control account. I have tried to use logic, but can't wrap my head around the answer??
PAYE and NI ledgers seem to have placed the HMRC ledger, so it makes sense that they are credit (liability) entries.
Gross wages and employers NI ledgers seem to have replaced the wages expense ledger, so I understand why they are debits, although they could have just as easily been credit entries and the wage expense account a debit entry that just isnt seen here... although maybe I should assume the whole system of ledgers being used to deal with the payroll must be shown.
What really throws me off though is that the net wages account is a credit entry, I suppose it must be to balance the journal entries, but I could have logically assumed other debit/credits. The net wages should be a credit in the bank ledger... this means the net wages ledger should be a debit entry!? Unless this is a temporary ledger, just to hold the money which we then credit when we want to pay it into the bank account before crediting the bank account again. But why?? It's just confusing.
Thanks!
We have been taught about the wage control account, but then one of the questions in the practice assessment shows completely different ledger accounts that have seemingly replaced the control account. I have tried to use logic, but can't wrap my head around the answer??
PAYE and NI ledgers seem to have placed the HMRC ledger, so it makes sense that they are credit (liability) entries.
Gross wages and employers NI ledgers seem to have replaced the wages expense ledger, so I understand why they are debits, although they could have just as easily been credit entries and the wage expense account a debit entry that just isnt seen here... although maybe I should assume the whole system of ledgers being used to deal with the payroll must be shown.
What really throws me off though is that the net wages account is a credit entry, I suppose it must be to balance the journal entries, but I could have logically assumed other debit/credits. The net wages should be a credit in the bank ledger... this means the net wages ledger should be a debit entry!? Unless this is a temporary ledger, just to hold the money which we then credit when we want to pay it into the bank account before crediting the bank account again. But why?? It's just confusing.
Thanks!
(edited 1 month ago)
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