The employees of Sinclair Services, Inc. worked the last two weeks of December. They received their paychecks on January 2. Which of the following accounts should appear on the balance sheet as of December 31?
A) Accounts Payable
B) Salaries Payable
C) Salaries Expense
D) Prepaid Expense

Question

Quizplus · Accepted Answer

Salaries Payable should be recorded on the balance sheet as of December 31 because the employees worked in December but were not paid until the following year. This is a current liability and represents an amount owed by the company to its employees for work performed but not yet paid for. Accounts Payable would not apply in this situation as it relates to amounts owed to vendors for goods or services received but not yet paid. Salaries Expense would be recorded on the income statement as an expense for the period, and Prepaid Expense would represent an asset that has been paid for in advance but has not yet been used or consumed.

The Employees of Sinclair Services, Inc