I own a sole business and sometimes there are payments that are yet to be made. For example, at the end of every month, I always deduct a certain percentage from the profit for a specific purpose, but it’s been two months and I have not made the payment.
Do I need to go to the month pending and register it as a liability? and how do I do that?.
Anytime I register any transaction as a liability through payment, my liability decreases and when I register as a receipt, the liability increases but it registers as an income so there’s extra balance which makes no sense to me.
I tried using control accounts but it’s more confusing.
I Would love a concised and clear explanation as how I can solve this problem, thanks