If there is a credit balance in the Factory Payroll Payable at the end of the accounting period, it represents

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A credit balance in the Factory Payroll Payable account represents labor costs that have not yet been distributed. This means that the company owes less to its employees than it had recorded in its accounts. This situation may arise if, for example, some employees have worked fewer hours than expected or if there have been overestimations of payroll taxes or benefits. However, it is not an indication of a difference between actual and applied payroll, nor should it be charged to Cost of Goods Sold.

If There Is a Credit Balance in the Factory Payroll