State Community College, a public college, grants faculty members a one-year sabbatical leave after each seven years of service. There are no requirements for research, study, or service during the compensated sabbatical leave. A particular faculty member earns $40,000 per year. Assuming that the college maintains its books and records in a manner that facilitates the preparation of fund financial statements and assuming that any appropriate accruals have been made, what is the appropriate entry to record the employee's salary paid while on sabbatical?
A) Debit Expenditures $40,000; Credit Cash $40,000.
B) Debit Sabbatical leave payable $40,000; Credit Cash $40,000.
C) Debit Expenditures $40,000; Credit Sabbatical leave payable $40,000.
D) No entry required.

Question

Quizplus · Accepted Answer

The correct entry to record the employee's salary paid while on sabbatical is to debit Expenditures for $40,000 and credit Cash for $40,000. This reflects the actual payment of the salary during the sabbatical leave as an expenditure of the college.

State Community College, a Public College, Grants Faculty Members a One-Year