Van Halen Company pays weekly wages every Friday. The current month ends on a Wednesday. The adjusting entry for wages will:
A) decrease liabilities and decrease cash.
B) increase liabilities and increase expenses
C) increase expenses and decrease cash
D) increase assets and increase expenses

Question

Quizplus · Accepted Answer

The adjusting entry for wages at the end of the month will increase liabilities (wages payable) because the company owes wages for the days worked but not yet paid, and it will increase expenses (wage expense) to reflect the cost incurred during the period.

Van Halen Company Pays Weekly Wages Every Friday