Use this information to answer the following question. Panadora Company has the following information for the pay period of January 1-15,2014.Payment occurs on January 20.
The entry on January 20 would be a debit to
A)Salaries Payable and a credit to Cash.
B)Salaries Payable and a credit to Salaries Expense.
C)Salaries Expense and a credit to Cash.
D)Salaries Expense and a credit to Salaries Payable.

Question

Use this information to answer the following question. Panadora Company has the following information for the pay period of January 1-15,2014.Payment occurs on January 20.
 The entry on January 20 would be a debit to
A)Salaries Payable and a credit to Cash. 
B)Salaries Payable and a credit to Salaries Expense. 
C)Salaries Expense and a credit to Cash. 
D)Salaries Expense and a credit to Salaries Payable.

Quizplus · Accepted Answer

The entry on January 20 would be a debit to Salaries Payable and a credit to Cash because the company has incurred salaries expense for the period of January 1-15, but payment is not made until January 20. Therefore, the amount owed to employees is recorded as a liability (Salaries Payable) until it is paid out in cash.

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