A company pays each of its two office employees each Friday at the rate of $100 per day for a five-day week that begins on Monday. If the monthly accounting period ends on Tuesday and the employees worked on both Monday and Tuesday, the month-end adjusting entry to record the salaries earned but unpaid is:
A) Debit Unpaid Salaries $600 and credit Salaries Payable $600.
B) Debit Salaries Expense $400 and credit Salaries Payable $400.
C) Debit Salaries Expense $600 and credit Salaries Payable $600.
D) Debit Salaries Payable $400 and credit Salaries Expense $400.
E) Debit Salaries Expense $400 and credit Cash $400.

Question

Quizplus · Accepted Answer

Each employee earns $100 per day, and both worked for 2 days (Monday and Tuesday), making it 2 days * 2 employees * $100/day = $400. The adjusting entry should recognize the expense incurred (Salaries Expense) and the obligation to pay (Salaries Payable).

A Company Pays Each of Its Two Office Employees Each