Kline Company accrued wages of $7,350 that were earned by employees unpaid at the year-end. Assuming Kline uses reversing entries, which of the following entries correctly reverses the accrued wages at the beginning of the following year?
A) Debit Wages Expense $7,350; credit Cash $7,350.
B) Debit Wages Payable $7,350; credit Wages Expense $7,350.
C) Debit Wages Expense $7,350; credit Wages Payable $7,350.
D) Debit Wages Payable $7,350; credit Cash $7,350.
E) Debit Cash $7,350; credit Wages Expense $7,350.

Question

Quizplus · Accepted Answer

Reversing entries are made to cancel out the accruals made in the previous period. The original accrual was a debit to Wages Expense and a credit to Wages Payable. To reverse this, you debit Wages Payable and credit Wages Expense.

Kline Company Accrued Wages of $7,350 That Were Earned by Employees