Ace Electronics paid $8,000 of the $10,000 its employees had earned during the period.Ace Electronics should report Salaries and Wages Expense of ________ on the income statement,Salaries and Wages Payable of ________ on the balance sheet,and a reduction in Cash of ________.

Question

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Expenses equal the amount incurred,regardless of whether the cash has been paid.As such,Salaries and Wages Expense,which is reported on the income statement,equals $10,000.The amount owed to employees of $2,000 will be reported as Salaries and Wages Payable,a liability,on the balance sheet.The cash payment of $8,000 would have decreased the company's cash account.

Ace Electronics Paid $8,000 of the $10,000 Its Employees Had