Gallery Corp. owes its employees $7,000 for the week ended March 31. The company will pay the employees on April 5. The adjusting journal entry prepared on March 31 will include a debit to Salaries Expense and a credit to Cash.

Question

Quizplus · Accepted Answer

The correct adjusting journal entry should include a debit to Salaries Expense and a credit to Salaries Payable, not Cash, because the payment will be made in the future, not at the time of the adjusting entry.