The employees of Leichester Services Company worked the last two weeks of December,2016.They received their paychecks on January 2,2017.Which of the following accounts should appear on the income statement for the year ended December 31,2016?
A) Salaries Expense
B) Prepaid Expense
C) Salaries Payable
D) Unearned Revenue

Question

Quizplus · Accepted Answer

Salaries Expense should appear on the income statement for the year ended December 31, 2016 as it represents the amount of wages paid to the employees for the work they did during the period. Prepaid Expense is a type of asset account that represents payments made in advance for goods or services that will be received in the future. Salaries Payable is a liability account that represents the amount of wages that have been earned by employees but have not yet been paid. Unearned Revenue is a liability account that represents payments received in advance for goods or services that have not yet been provided. None of these accounts represent the wages earned by the employees during the period for which the income statement is being prepared.

The Employees of Leichester Services Company Worked the Last Two