USA FSA Set up

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Dec 16, 2022
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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?
 

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