An employer ran payroll and one of the employees was paid a portion of their net pay in cash (from their pocket) and the remainder in a check. The check was then double endorsed and the employer paid w/cash sitting in the office (not petty cash). The bank statement shows the check portion paid and then again as a deposit. How would I reconcile this?
First off, i would remind your client to not do this sort of thing!
To reconcile the bank, make sure the transactions match your bank statement. You want to keep the payroll record in tact. When the client re-deposited the check, do not post it to wages. You may be able to post the re-deposit to Employee advance. The cash that was given to the employee should also be posted to Employee advance. these transactions should zero out the Advance account, keep the payroll record in tact, and account for the bank transactions.
Hope this helps.
Trust I have scolded the client on not repeating this action again. Hopefully it will register.
Your response is helpful. Using an Employee advance account never crossed my mind. Thanks again.