Asked by Vanessa Grossman on May 01, 2024
Verified
A company pays an employee $3,000 for a five-day work week, Monday-Friday. The adjusting entry on December 31, which is a Wednesday, is a debit to Wages Expense, $1,800, and a credit to Wages Payable, $1,800.
Wages Expense
Wages expense refers to the total cost incurred by a business for paying salaries or wages to its employees over a specific period.
Wages Payable
A liability account that records the amount of wages earned by employees but not yet paid by the company.
- Understand the treatment of deferred revenues and expenses in the accounting cycle.
- Recognize different kinds of adjusting entries and their effects on financial reports.
Verified Answer
ZK
Zybrea KnightMay 05, 2024
Final Answer :
True
Explanation :
The employee earns $600 per day ($3,000/5 days). By Wednesday, they have worked three days, totaling $1,800 ($600 x 3 days), which is correctly recorded as both a debit to Wages Expense and a credit to Wages Payable, reflecting the amount earned but not yet paid.
Learning Objectives
- Understand the treatment of deferred revenues and expenses in the accounting cycle.
- Recognize different kinds of adjusting entries and their effects on financial reports.
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