If accrued salaries were recorded on December 31 with a credit to Salaries Payable, the entry to record payment of these wages on January 5 would include:
A)A debit to Cash and a credit to Salaries Payable.
B)A debit to Salaries Payable and a credit to Salaries Expense.
C)A debit to Cash and a credit to Prepaid Salaries.
D)A debit to Salaries Payable and a credit to Cash.
E)No entry would be necessary on January 5.

Question

Quizplus · Accepted Answer

When the accrued salaries were recorded on December 31 with a credit to Salaries Payable, it means that Salaries Payable account was credited for the total amount of unpaid salaries that remained due till December 31.

When the payment is made on January 5, the company needs to reduce its liability by making a payment. Therefore, the entry required to record payment of these wages on January 5 would include a debit to Salaries Payable and a credit to Cash.

Hence, option D is the correct answer.

If Accrued Salaries Were Recorded on December 31 with a Credit