98 – Bonuses – Owners

Adjustments

Synopsis

Account 98

Remarks:

This expense account is not departmentalized.

Bonuses to owners and officers which are based upon retailer profit should be accrued monthly.

Bonuses are generally paid quarterly or annually, however, the provision for the amount should be made monthly.  Incentives and overrides not based upon retailer profit should be recorded in the applicable salary account.

Bonuses recorded in this account are payable at the discretion of executive management.  Bonuses paid proprietor or partners should be charged to Drawing (Account 390).

When paid, bonuses should be recorded in the payroll journal with applicable payroll taxes deducted.