On the books of the entity if election is or is not filed the money has to be recorded somewhere on the books whether GAAP or not.  GAAP would apply if the entity is required to maintain their books in accordance with GAAP not tax for financial reporting.   If no election I make an entry to sh distributions.  If an election was filed, I show as an expense, might not be GAAP but the funds are accounted for.  This way the federal return and the accounting records (usually QB) agree.  This is how I handle the nr withholding.