Directors bonus


B

Barry

Whilst preparing accounts to 31 December 2002, it was decided to post a
Directors bonus to the 2002 accounts whilst payment of this will be paid in
July 2003.

Could anyone let me know if the bonus is posted to the 2002 accounts as a
gross item or do we have to account for the PAYE deductions and post the net
bonus to a Directors Loan Account along with a creditor for the PAYE?

Is there anything else we need to be aware of for this type of transaction.

Thank you in advance for any information.
 
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P

Peter Saxton

Whilst preparing accounts to 31 December 2002, it was decided to post a
Directors bonus to the 2002 accounts whilst payment of this will be paid in
July 2003.

Could anyone let me know if the bonus is posted to the 2002 accounts as a
gross item or do we have to account for the PAYE deductions and post the net
bonus to a Directors Loan Account along with a creditor for the PAYE?
It's both!

Dr Director's Bonus
Dr Director's Bonus 'Ers NIC
Cr Directors Loan
Cr PAYE & NIC

I wouldn't favour using accruals which I think is what you were also
looking at.



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