GL Accounts Explanation

Employee GOSI

Liability (Credit)

Tracks employee GOSI contributions deducted from salaries.

$50 deduction credits to this account.

Reduces salary liability.

Company GOSI

Expense (Debit)

Records the employer’s GOSI contribution.

$100 contribution debits this account.

Increases expenses.

GOSI Clearance Account

Liability (Credit)

Clears company GOSI contributions upon payment.

$100 payment credits this account.

Reduces liability.

Employee Health Insurance

Liability (Credit)

Tracks employee health insurance deductions.

$30 deduction credits this account.

Reduces salary liability.

Company Health Insurance

Expense (Debit)

Records the employer’s health insurance contribution.

$70 contribution debits this account.

Increases expenses.

Company Health Insurance Clearance Account

Liability (Credit)

Clears employer health insurance contributions.

$70 payment credits this account.

Reduces liability.

Service Termination Benefits

Expense (Debit)

Accrues termination benefits owed to employees.

$1,000 owed debits this account.

Increases expenses.

Service Termination Benefits Clearance Account

Liability (Credit)

Clears termination benefits upon payment.

$1,000 payment credits this account.

Reduces liability.

Basic Salary

Expense (Debit)

Records base salary costs.

$2,000 salary debits this account.

Increases expenses.

Absence Amount

Contra-Expense (Credit)

Reduces salary expense for absences.

$100 absence credits for this account.

Reduces expenses.

Worth Basic Salary

Expense (Debit)

Net basic salary after absences.

$1,900 debits this account.

Adjusts expenses.

Salary Difference

Expense (Debit/Credit)

Adjusts for mid-period salary changes.

$200 raise debits this account.

Adjusts expenses.

Clearance Account

Liability (Credit)

Accumulates salary liabilities until paid.

$1,800 payment credits this account.

Reduces liability.

Net Income

Liability (Credit)

Represents net salary payable.

$1,800 net salary credits this account.

Tracks payable.

Bank Transfer

Asset (Debit)

Tracks salary payments from the company bank.

$1,800 transfer debits this account.

Reduces cash.

Off-Cycle Settlements Clearance Account

Liability (Credit)

Clears off-cycle payments (e.g., bonuses).

$500 bonus credits for this account.

Reduces liability.

Vacation In-Advance Salary

Asset (Debit)

Records prepaid vacation salaries.

$500 advance debits this account.

Increases assets.

Vacation In-Advance Salary Clearance

Liability (Credit)

Clears vacation salary advances.

$500 adjustment credits this account.

Reduces liability.

Service Termination Benefits Provision

Liability (Credit)

Accrues future termination benefits.

$200 provision credits this account.

Increases liability.

Service Termination Benefits Provision Clearance

Contra-Liability (Debit)

Clears provision when benefits are paid.

$1,000 payment debits this account.

Reduces liability.

Air Ticket Provision

Liability (Credit)

Accrues air ticket benefits.

$300 provision credits this account.

Increases liability.

Air Ticket Provision Clearance

Contra-Liability (Debit)

Clears provision when tickets are issued.

$300 issuance debits this account.

Reduces liability.

Vacation Compensation Provision

Liability (Credit)

Accrues vacation compensation.

$200 provision credits this account.

Increases liability.

Vacation Compensation Provision Clearance

Contra-Liability (Debit)

Clears provision when compensation is paid.

$200 payment debits this account.

Reduces liability.

Extra Salary Provision

Liability (Credit)

Accrues extra salary payments (e.g., bonuses).

$500 provision credits this account.

Increases liability.

Extra Salary Provision Clearance

Contra-Liability (Debit)

Clears provision when extra salaries are paid.

$500 payment debits this account.

Reduces liability.

Income

Expense (Debit)

Records additional employee earnings.

$100 allowance debits this account.

Increases expenses.

Deduction

Liability (Credit)

Record amounts withheld from salaries.

$50 tax deduction credits this account.

Reduces salary liability.