 Of the process that you might have to go through if changing payroll So if I go to the first tab here and I hold control down and I go down to the payroll We went to last time We went to the overview and then we ran payroll which is in the run payroll on the right-hand side now this Processed in essence the payroll checks and the withholdings and the impacts on the financial statements from the transactions Now we just want to point out that with payroll it can be a little bit more complex to make adjustments to payroll We can't just go in and adjust the paychecks as easily because we have to be careful about all the withholdings and Calculations related to the payroll taxes also when trying to practice and learn payroll It can be difficult with a practice problem because the payroll works best when it's running real time In other words if you're working this practice problem at some point into the future If it's too far into the future Then you might have difficulty running the payroll because it works best in real time the other issue with that We do have payroll courses to kind of dive into this in more detail But the other problem with payroll is that payroll looks quite different from the first quarter to the fourth quarter Because there's going to be caps that could be hit and now those are most clear when you see the the futa tax federal unemployment Tax act which has a fairly low tax So the taxes with relation to that particular payroll tax Will be a lot different from quarter one to quarter two to quarter three to quarter four in which case quarter four unless you have new employees You're not going to see much of that tax and the social security has a cap as well Although it's a lot higher of a cap. So if anybody's going to hit it They wouldn't hit it until quarter three or quarter four or something like that But you don't get to see those changes if you only process one quarter in other words if you're trying to Process or see what's going on with your 941s when you process them on a quarterly basis The typical thing is to say, okay, well it's quarter two I'm going to compare what happened to quarter one to quarter two But things can be a little bit different because of these caps that people can hit on it And so that's something that we got a you know, you got to just kind of be aware of and it's a difficulty To run the payroll problems now also What was impacted on the financial statements are multiple accounts here So we've got of course the liabilities that were impacted You'll recall for the withholdings for our withholdings and the employee withholdings We've got then on the income statement We've got the wages and the tax accounts that were impacted and we have a whole bunch of other payroll for reports Those are going to help us to report the payroll tax Stubs to the employees on a year-to-date basis as well as a paycheck by paycheck basis and Do the 941s to 940s to w2s and w3s therefore It's not as easy for us to just make a change in other words if I'm saying there's a check that is incorrect Normally, I can go okay. Well, I'll just go to the balance sheet here and I'm gonna go into the Cash and I can say okay this check maybe it's wrong for whatever reason it doesn't match what actually Was deposited into the bank account or something like that when we do the bank reconciliation Well, I can't just go in here and and change the amount of the check clearly It's gonna cause an issue and even with the dates We want to kind of be careful with that because if I if I mess up the reporting the way if I don't Do the payroll within the QuickBooks system Then the reports will not match and your w2s won't match and your cash You know your calculations for the payroll taxes and all that kind of stuff will get all messed up So that's why the adage For payroll is typically do it first the first time And measure measure twice cut once as opposed to tinkering until you get it right Some things are great for tinkering until you get it right Some things are better off to get it right the first time measure twice cut once payroll better off to get it The first time if you do make an error then typically you need to avoid the check As opposed to deleting it because usually in practice We want to make sure that we have A paper trail of the data because employees are the most likely person to sue us unfortunately as well And it's and it's most likely that we're going to run into problems that we want to see a paper trail with So I want to be as transparent as possible With everything that we're putting into the system now in our practice problem So you'd usually have to avoid it and then you'd have to process the payroll again So that the system can process the payroll check properly and do all the reporting properly Okay, so but in our practice problem We made an error in in the recording Of one of the taxes and I wanted to tie out to our practice problem over here to this paycheck That's going to be on our bank reconciliation So we're going to do something that I don't recommend doing in practice But we're going to do in the practice problem to make the bank reconciliation Correct. So and the and the error was in the calculation of uh of Social security and medicare So so just to note the issues so you can see how these kind of problems happen with payroll taxes uh And how they can get kind of complex, you know, all of a sudden, right? We had we had an error in the calculation of I think the social security tax, right? So if you got an error in the social security tax calculation, what is that going to impact? Well, if I go if I go to the balance sheet The balance sheet got deleted here. I'm going to go from 0 1 0 1 2 3 to 12 3 1 2 3 And run it then we're going to have we're going to have This liability that's going to be impacted here For the taxes, but it's not only just going to be the employee portion But also the employer portion because there's a matching thing. So if I got it wrong on the employee side It's likely that we got it wrong on both sides And then on the income statement There's going to be an impact on both the wages because the wages include the employee portion of the tax And on the taxes here, which are payroll taxes because those are the taxes that we pay over and above So you can see just this little kind of miscalculation can get quite complex and the number of things that are going to be impacted Also, the other reports are going to be impacted the w2 stub or the paycheck stubs are impacted and so on