Kasper Electric has two part-time employees,each of whom earns $200 per day.They are normally paid on Fridays for work completed Monday through Friday of the same week.December 27,2013,was a Friday,and they were paid in full on that day.The employees worked on Monday and Tuesday,December 30 and 31,2013.How would the company record the related adjusting entry on December 31,2013?
A)Debit Salaries Expense for $200 and credit Cash for $200.
B)Debit Salaries Expense for $400 and credit Cash for $400.
C)Debit Salaries Expense for $200 and credit Salaries Payable for $200.
D)Debit Salaries Expense for $400 and credit Salaries Payable for $400.
E)Debit Salaries Expense for $400,credit Salaries Payable for $200,and credit Cash for $200.

Question

Quizplus · Accepted Answer

The adjusting entry should recognize the employees' earnings for December 30 and 31, which have not yet been paid as of December 31. Therefore, Salaries Expense should be debited for the total amount earned by both employees ($400), and Salaries Payable should be credited for the same amount, representing the amount owed but not yet paid.

Kasper Electric Has Two Part-Time Employees,each of Whom Earns $200