If accrued salaries were recorded on December 31 with a debit to Salaries Expense and a credit to Salaries Payable, and no reversing entries were made on January 1, the entry to record payment of these wages on the following January 5 would include:
A) A debit to Cash and a credit to Salaries Payable.
B) A debit to Cash and a credit to Prepaid Salaries.
C) A debit to Salaries Payable and a credit to Salaries Expense.
D) A debit to Salaries Payable and a credit to Cash.
E) No entry would be necessary on January 5.

Question

Quizplus · Accepted Answer

Since the accrued salaries were recorded with a credit to Salaries Payable, the payment of those wages would require a debit to Salaries Payable in order to reduce the liability, and a credit to Cash to reflect the cash outflow. Therefore, option D is the correct choice. Option A is incorrect because it would be the entry if the reversing entry has been made. Option B is incorrect because prepaid salaries refer to wages paid in advance, not accrued. Option C is incorrect because it would increase the Salaries Expense account, which has already been properly recorded at year-end. Finally, option E is incorrect because a transaction did occur and an entry is needed.

If Accrued Salaries Were Recorded on December 31 with a Debit