Sunset Company has a policy of accruing $2300 for every employee as a vacation benefit.Sarah,an employee,took a vacation.Which of the following is the correct journal entry for the vacation benefit paid?
A) $$\begin{array} { | c | l | l | }
\hline \text { Vacation Benefits Payable } & 1917 & \
\hline \text { Vacation Benefits Expense } & & 1917 \
\hline
\end{array}$$
B) $$\begin{array} { | c | l | l | }
\hline \text { Vacation Benefits Expense } & 2300 & \
\hline \text { Cash } & & 2300 \
\hline
\end{array}$$
C) $$\begin{array} { | c | l | l | }
\hline \text { Vacation Benefits Payable } & 2300 & \
\hline \text { Cash } & & 2300 \
\hline
\end{array}$$
D) $$\begin{array} { | c | l | l | }
\hline \text { Vacation Benefits Expense } & 1917 & \
\hline \text { Vacation Benefits Payable } & & 1917 \
\hline
\end{array}$$

Question

Sunset Company has a policy of accruing $2300 for every employee as a vacation benefit.Sarah,an employee,took a vacation.Which of the following is the correct journal entry for the vacation benefit paid?
A) $$\begin{array} { | c | l | l | } 
\hline \text { Vacation Benefits Payable } & 1917 & \
\hline \text { Vacation Benefits Expense } & & 1917 \
\hline
\end{array}$$
B) $$\begin{array} { | c | l | l | } 
\hline \text { Vacation Benefits Expense } & 2300 & \
\hline \text { Cash } & & 2300 \
\hline
\end{array}$$
C) $$\begin{array} { | c | l | l | } 
\hline \text { Vacation Benefits Payable } & 2300 & \
\hline \text { Cash } & & 2300 \
\hline
\end{array}$$
D) $$\begin{array} { | c | l | l | } 
\hline \text { Vacation Benefits Expense } & 1917 & \
\hline \text { Vacation Benefits Payable } & & 1917 \
\hline
\end{array}$$

Quizplus · Accepted Answer

When an employee takes a vacation, the company should relieve the liability it has accrued for that vacation benefit. The correct entry debits the liability account (Vacation Benefits Payable) and credits Cash, reflecting the payment of the benefit.

Sunset Company Has a Policy of Accruing $2300 for Every