Two employees worked a week and the business paid salaries of $1,200.The journal entry would:
A)debit Cash for $1,200 and credit Salaries Payable for $1,200.
B)debit Accounts Payable for $1,200 and credit Cash for $1,200.
C)debit Accounts Payable for $1,200 and credit Salary Payable for $1,200.
D)debit Salary Expense for $1,200 and credit Cash for $1,200.

Question

Quizplus · Accepted Answer

The payment of salaries to employees is an example of an expense transaction. The expense account Salary Expense should be debited for the amount paid, which is $1,200 in this case. Since the payment was made in cash, the Cash account should be credited for the same amount. Therefore, the correct journal entry is: Debit Salary Expense for $1,200 and credit Cash for $1,200. Option A is incorrect because Salaries Payable implies that the payment will be made later, and in this case, the payment was already made. Option B is incorrect because it implies that the payment was made to a vendor or supplier, but in this case, it was made to employees. Option C is incorrect because it suggests that Salaries Payable is a separate account, which is not the case.

Two Employees Worked a Week and the Business Paid Salaries