Accrued salaries at 12/31/10 are $2,000. The adjusting entry would include

Question

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Accrued salaries represent an obligation to pay employees for work they have already performed but have not yet been paid for, so it is a liability. Therefore, the adjusting entry will include a credit to salaries payable for $2,000. Option A (a debit to salaries payable for $2,000) is incorrect because it would increase the liability when it should be decreasing; Option B (a debit to salaries expense for $28,000) is incorrect because it implies that $28,000 of salaries were earned in the period, which is not information given in the question; Option D (a credit to salaries expense for $28,000) is incorrect for the same reason as Option B.

Accrued Salaries at 12/31/10 Are $2,000