Hire employee: Financial events series, part 10 of 29
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TechnolOntario hires a programmer. His salary costs $33,800 per year, paid biweekly (i.e., 26 times a year).
The journal entry would not record this event. The signing of any contract, including the hiring of an employee, is not considered a financial transaction for accounting purposes.
Information on this series
To demonstrate how various business transactions and other economic events impact the financial statements, this series tracks the accounts of the first fiscal year of a fictional start-up company called TechnolOntario, Inc. Common financial events are introduced and recorded one by one, and they accumulate on the financial statements as TechnolOntario’s fiscal year progresses.
Note that together these examples form a series of 29 articles. Check our complete list of accounting examples to specifically select which ones you’d like to see. Or you can follow the series from start to finish. This article is part 10 of 29.
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References
Markle, K. (2004, August). Introduction to Accounting. Presentation delivered at Schulich School of Business, York University, Toronto, Canada.
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Purchase of goods for resale: Financial events series, part 8 of 29 This example shows how the purchase of goods for resale is recorded in the journal entry and the financial statements.
Pay utilities: Financial events series, part 25 of 29 This example shows how the payment of utilities is recorded in the journal entry and on the financial statements.
T-accounts In the ledger, accountants keep a running balance of the funds in different accounts using a system called a T-account.
Deferred sale: Financial events series, part 16 of 29 This example shows how a deferred sale is recorded in the journal entry and on the financial statements.
Pay accounts payable: Financial events series, part 18 of 29 This example shows how the payment of accounts payable is recorded in the journal entry and financial statements.
Introduction: Financial events series, part 1 of 29 The examples in this series demonstrate how different business transactions are recorded in the financial statements.
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