My company is offering a FSA benefit. I will be setting up a bank account and transfer the annual amount the employees declared for the FSA program ($2,600) to this new FSA bank account. From what I understand there should be a FSA receivable account and FSA Liability account set up on the COA. So the entry would be:
DR FSA Recv $2,600
CR FSA Liab $2,600
When payroll is run, the amount for the FSA is $100 per pay check ($2,600/26 pay periods= $100). Gross wages are $800
DR Wages $800
CR FSA Recv $100
CR Cash $700
When an employee goes to the doctor ($30):
DR FSA Liab $30
CR Cash (from FSA Bank account) $30
Is this the correct accounting?
DR FSA Recv $2,600
CR FSA Liab $2,600
When payroll is run, the amount for the FSA is $100 per pay check ($2,600/26 pay periods= $100). Gross wages are $800
DR Wages $800
CR FSA Recv $100
CR Cash $700
When an employee goes to the doctor ($30):
DR FSA Liab $30
CR Cash (from FSA Bank account) $30
Is this the correct accounting?