Hugh Morris Company pays weekly wages of $10,000 every Friday for a five day week ending on that day.If the last day of the year is on Wednesday,the adjusting entry to record the accrued wages is:

Question

Quizplus · Accepted Answer

Since the last day of the year falls on a Wednesday, there are two days of wages owed to employees for Thursday and Friday (assuming they work Monday to Friday). Therefore, the adjusting entry would be to debit Wages Expense for the amount of $6,000 (2 days x $3,000 daily wages) and credit Wages Payable for the same amount, indicating that this is an amount owed to employees but not yet paid out. Choice A is incorrect because it only records a cash transaction, not the accrued wages. Choice B is incorrect because it only records half of the accrued wages. Choice D is incorrect because Drawing is not an appropriate account to credit for an adjusting entry of this nature.

Hugh Morris Company Pays Weekly Wages of $10,000 Every Friday