Question

4) The employees of Able Company have worked the last two weeks of Year 1, but the employees salaries have not been paid or recorded as of December 31, Year 1. The adjusting entry that Able should make to accrue these unpaid salaries on December 31, Year I is: Ardebit to Salaries Expense and credit to Salaries Payable. B) no entry is required until the employee is paid next period. C) debit to Salaries Payable and credit to Salaries Expense. D) debit to Salaries Expense and credit to Cash.

Answer 1

Answer: a) Debit to Salaries Expense and credit to Salaries Payable

Explanation:

As per accrual concept the expenses are recognised in the period as an when they are occured.

Following the accrual concept Able company should pass the following salaries payable journal entry.

Salaries Expense A/c Dr

To Salaries Payable

Later in January when the salaries are paid, the employer would debit the salaries payable account because the salaries are no longer owed to the employees and credit the cash account for the amount of cash paid to the employees.

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