The employees of Sinclair Services Company 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 appear on the balance sheet as of December 31 because the employees worked in December but were not paid until January. This represents an obligation the company has to pay its employees in the future and is classified as a current liability. Accounts Payable would not be appropriate as it represents a liability to suppliers for goods or services purchased on credit, which is not applicable to this scenario. Salaries Expense would be recorded on the income statement and represents the expense incurred by the company for employee wages during the month. Prepaid Expense would represent an expense paid in advance for a future benefit, which is not applicable to this scenario.

The Employees of Sinclair Services Company Worked the Last Two