A company owes its employees $5,000 for the year ended December 31. It will pay employees on January 6 for the previous two weeks' salaries. The year-end adjusting on entry on December 31 will include a debit to Salaries Expense and a credit to Cash.

Question

Quizplus · Accepted Answer

The correct year-end adjusting entry should include a debit to Salaries Expense and a credit to Salaries Payable (or Wages Payable), not Cash, because the cash payment has not yet occurred; it is planned for January 6.

A Company Owes Its Employees $5,000 for the Year Ended