A business pays weekly salaries of $35000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on a Wednesday is
A) debit Salaries and Wages Payable $21000; credit Cash $21000.
B) debit Salaries and Wages Expense $21000; credit Cash $21000.
C) debit Salaries and Wages Expense $21000; credit Salaries and Wages Payable $21000.
D) debit Salaries and Wages Expense $14000; credit Salaries and Wages Payable $14000.

Question

Quizplus · Accepted Answer

Since the end of the fiscal period is on a Wednesday and the business pays weekly salaries on Fridays, the employees have worked only 3 out of the 5 days of the week. Therefore, only 3/5 of the weekly salaries are considered as an expense for the current fiscal period. The adjusting entry would therefore debit Salaries and Wages Expense for $21,000 (3/5 x $35,000) and credit Salaries and Wages Payable for the same amount to recognize the expense for the period and record the amount owed to employees for the remaining two days of work.

A Business Pays Weekly Salaries of $35000 on Friday for a Five-Day