If the pay period does not coincide with the end of the accounting period, which of the following is true?
A)Payroll entries are not made until payroll is paid.
B)Payroll payable must be accrued.
C)Overtime must be recalculated.
D)None of the answer choices is correct.

Question

Quizplus · Accepted Answer

If the pay period does not coincide with the end of the accounting period, then some employees might have earned wages that have not yet been paid, which creates a liability called the payroll payable. Therefore, payroll payable must be accrued to ensure that the financial statements reflect the accurate amount owed for wages earned but not yet paid. Choices A and C are incorrect because payroll entries and overtime calculations are still necessary regardless of whether the pay period coincides with the end of the accounting period.

If the Pay Period Does Not Coincide with the End