A company's five-day weekly payroll of $890 is paid on Fridays. Assume that the last day of the month falls on Wednesday. Which of the following is the required adjusting entry for the month end?

Question

Quizplus · Accepted Answer

Since the last day of the month falls on Wednesday, two days of payroll expenses ($890/5 days = $178/day x 2 days = $356) are still owed to employees and not yet paid. Therefore, we need to debit Salaries Expense for $356 and credit Salaries Payable for $356 to reflect the expenses incurred but not yet paid. The remaining $534 of payroll expenses have already been paid and do not require an adjusting entry. Option A is incorrect because it reverses the correct account titles. Option C uses an incorrect account title. Option D miscalculates the amount of unpaid payroll expenses.

A Company's Five-Day Weekly Payroll of $890 Is Paid on Fridays