Taxpayer closed business.
They called CRA and closed the RP account.
The Payroll Liabilities account on BS has a nominal credit balance.
To close out this account (after confirming balance is 0 with CRA) I will eneter the follow journal entry
Debit Payroll Liabilities $200
Credit Payroll Expenses $200
Is this how others would do this?
Close enough for gov’t work.
Any time a reversal is being made it should go through the same account as the original charges. That’s bookkeeping 101.
Don’t know about anyone else, but we learned to write Dr/Cr. (Yes…that was back in the dark days of the 1970s.)
I hope this isn’t a joke on millennials lol
Assuming you posted $200 as example.
Client can apply to CRA to have the monies refunded.
They would be refunded to the shareholder personally ( require SIN, address, etc. ) upon submission of a request from the director in the form of a shareholder resolution.
Have successfully received the recoverable income tax when the corporation wound up with a loss
Actually, you mean dr or cr…
Same here. I was about to ask what DT and CT meant. LOL Showing my age, I guess.
In your statement of fact, the CRA payroll account is closed and at $0.
The bookkeeping GL has a normal credit balance of $200.
Assuming that $200 is immaterial and does not warrant revising prior periods for GL or tax purposes, I would do exactly as you stated with one exception, if any other account CRA account is out by $200. This would happen if the there had been an over payment by $200 and a transfer of that $200 amount to another CRA account, either GST/HST or RC corporation account.
Other wise the $200 could be either a old data entry entry or two CRA payroll late filing penalties of $100 each which were not recorded on the GL.
DR/ CR vs DT/ CT
I’m a boomer and this is the first time that I have come across the DT/CT terminology. I assume that this means debit transaction and credit transaction. My guess is that this would be used by non-bookkeeping trained programmers or by those who never used T-accounts, day books, onwrite, huge ledger sheets, or manual creation of a general ledger from the individual sub-legders. Recently I was surprised that one of the top Intuit QuickBooks trainers in the US does not understand debits and credits. This individual relies on QBDT or QBO to create the create reports and relies on others to confirm the adjusting entries. So, kudos the questioner for working with debits and credits.
I use DR/ CR for debit record / credit record which likely originated from the Latin terms debitum and creditum from the time of Luca Pacioli which is now known in the Western World as the “Father of Accounting” upon which all modern day, double entry accounting systems are based.
There is no indication from the OP that a balance remains at CRA…just in the books (not an unusual circumstance where bookkeeping errors/differences have been made or misrecorded).
From the post it appears simply to be an incorrect balance in the GL, in which case a reversal would be all that is required.
Back in my University days, we’ve never been thought to to use DT/CT only DR/CR. I graduated from college in 2010, so I’m not too sure if the standards have changed. Maybe presumably OP was referring to a t-chart as dt/ct.
the post has been amended to say debit and credit. Have a nice weekend.