IRA Question

[ajm100]

I hope this is in the correct forum.

I work for a small psychology office as a part-time bookkeeper. The managing director of the company has an IRA contribution withholding from his paycheck.

In the year end of 2010, we had a credit liability balance in the IRA account of $840 on the balance sheet. How do I bring it over as a beginning balance for 2011?

Do I credit the IRA liability account for $840 and debit the retained earnings account for $840?

Your help is greatly appreciated.

Thanks

 

[Triest123]

I hope this is in the correct forum.

I work for a small psychology office as a part-time bookkeeper. The managing director of the company has an IRA contribution withholding from his paycheck.

In the year end of 2010, we had a credit liability balance in the IRA account of $840 on the balance sheet. How do I bring it over as a beginning balance for 2011?

Do I credit the IRA liability account for $840 and debit the retained earnings account for $840?

Your help is greatly appreciated.

Thanks

=> The withholding IRA contribution should be paid to the fund house. It is not your
company's expenses.

Your company has a credit liability balance in the IRA account implies that
your company has not yet been paid the money to fund house on behalf of
your employee.

Once you have made a payment, then accounting entry shall be

Dr IRA Account
Cr Bank