USA Bonus accrual - year end adjustment

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Hello everyone! First post here and it has to do with yearly bonuses.
During 2022, we accrued bonuses monthly to account for the 2022 bonus to be paid at the year end.
Now that 2022 is over, we find that we over accrued the amount and are paying out substantially less than we planned.
How do I properly adjust this in my books? Does the adjustment go in December 2022, or?
 

kirby

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If your 2022 books are NOT already closed and results NOT reported then adjust in 2022.

if books already closed, then it depends on if the “extra” expense is material to your 2022 financials. If yes, do a prior period adjustment. If no, then adjust in 2023.
 
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Hello everyone! First post here and it has to do with yearly bonuses.
During 2022, we accrued bonuses monthly to account for the 2022 bonus to be paid at the year end.
Now that 2022 is over, we find that we over accrued the amount and are paying out substantially less than we planned.
How do I properly adjust this in my books? Does the adjustment go in December 2022, or?
The current bonus accounting entries should be:

Dr. Accrued bonus payable. XXX
Cr. Cash. XXX

The monthly bonus balance remaining in the bonus payable account for each month should be adjusted as follows:

Dr. Accrued bonus payable. XXX
Cr. Income summary account. XXX
 

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