The employees of Pinnacle,Inc.worked during July but are not paid their wages totaling $800 until August.Which of the following best indicates how to account for this transaction in July?
A)No journal entry needs to be made because payment has not yet been made.
B)A journal entry with a debit to Salaries and Wages Expense and a credit to Deferred Expense for $800 should be recorded.
C)A journal entry with a debit to Salaries and Wages Payable and a credit to Salaries and Wages Expense for $800 should be recorded.
D)A journal entry with a debit to Salaries and Wages Expense and a credit to Salaries and Wages Payable for $800 should be recorded.

Question

Quizplus · Accepted Answer

This period's wages are reported as Salaries and Wages Expense on the income statement and any unpaid wages are reported as Salaries and Wages Payable on the balance sheet.The related entry would include a debit to Salaries and Wages Expense and a credit to Salaries and Wages Payable for $800.

The Employees of Pinnacle,Inc