Part 5 (Accounting for Labor) Flashcards
The accounting procedures for labor may be divided into two distmet phases:
- Collection of payroll data, computation of earnings, calculation of payroll taxes, and payment of wages.
- Distribution and allocation of labor costs to jobs, departments, and other. cost classifications.
In most factories, ____________ are used to record the days or hours worked by each employee.
These are used as the basis in computing the gross earnings of employees who are paid hourly wages.
clock cards/time records
In addition to these clock cards, time tickets are prepared for each worker to determine the ______________ as basis in determining the amount to be charged to direct labor cost and indirect labor cost.
time spent for each job
are sorted, priced, and summarized, and the time ticket hours should be reconciled with the clock card hours.
time tickets for various jobs
At regular intervals, usually daily or weekly, the ________ and ________ for each job are entered on the job order cost sheets.
labor time
labor cost
For each payroll period - weekly, every two weeks, or monthly - the summary of employees’ earnings and the liability for payment is ________ and posted to the ___________?
journalized
general ledger
The entry to record the payroll and the incurrence of liability is
Dr: Payroll
Cr: Withholding Tax Payable
SSS Premium Payable
Phil Health Contribution Payable
Accrued Factory Payroll
The entry to record the distribution of payroll is
Dr: Work in process
Factory Overhead Control
Cr: Payroll
The entry to record the payment of payroll is
Dr: Accrued Factory Payroll
Cr: Cash
The _________ account is used to charge the jobs with the direct labor cost.
work in process
is charged for the indirect labor cost incurred.
Factory overhead control
The tax withheld is computed based on the table provided by the __________________.
Bureau of Internal Revenue
For the SSS Premiums and Phil Health Contributions, the table is provided by the ______________
Social Security System.
The clearing account for the total wages due to the factory personnel is the payroll account summarized as follows:
Dr side: Total wages and salaries earned by factory personnel during the payroll period
Cr side: Total payroll during the payroll period at the same time debiting work in process for direct labor and overhead for indirect labor
The account used to accumulate the liability for payroll or factory overhead is the Accrued Factory Payroll summarized as follows:
Dr side: Total amount of wages paid to factory personnel at the time crediting
Cr side:
- Balancing beginning accounts payable or cash
- Total amount of wages and salaries due to factory personnel at the same time debiting payroll.
