Assume that the City of Juneau maintains its books and records to facilitate the preparation of its fund financial statement.The City pays its employees bi-weekly on Friday.The fiscal year ended on Wednesday, June 30.Employees had been paid on Friday, June 25.The employees paid from the General Fund had earned $120,000 on Monday, Tuesday, and Wednesday (June 28, 29, and 30).What entry, if any, should be made on June 30?

Question

Quizplus · Accepted Answer

An entry should be made to reflect the expenses of paying the employees for their work from June 28-30. The entry should be a debit to Expenditures (or Wages and Salaries Expense) and a credit to Wages and Salaries Payable. Therefore, choice A is the correct answer. Choice B is incorrect because the city is not paying a bill for services already rendered, but rather recognizing the expense of paying their employees. Choice C is incorrect because encumbrances are used to set aside funds for anticipated expenses, so it would not be appropriate in this situation. Choice D is also incorrect because an entry is needed to reflect the expenses incurred.

Assume That the City of Juneau Maintains Its Books and Records