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 Cash.
D)A debit to Salaries Payable and a credit to Salaries Expense.
E)No entry would be necessary on January 5.

Question

Quizplus · Accepted Answer

Since the accrued salaries were recorded on December 31 with a debit to Salaries Expense and a credit to Salaries Payable, it means that the expense has already been recognized and is recorded in the Salaries Expense account. The Salaries Payable account represents the amount owed to employees as of December 31. Therefore, when the salaries are paid on January 5, the company will debit Salaries Payable (to reduce the liability) and credit Cash (to record the cash outflow). The debit to Salaries Payable reduces the balance in that account and reflects the fact that the company has now paid off its obligation to its employees. The credit to Cash reflects the cash outflow from the company's checking account when the company paid the salaries.

If Accrued Salaries Were Recorded on December 31 with a Debit