Asked by Egypt Falaah on May 31, 2024
Verified
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 entry on December 31 will include a debit to Salaries Expense and a credit to Cash.
Salaries Expense
Represents the total amount paid to employees as wages or salaries before any deductions, recognized in the accounting period in which employees' services are utilized.
Year-End Adjusting Entry
An accounting entry made at the end of a fiscal year to update accounts for revenues earned or expenses incurred but not yet recorded.
Credit To Cash
A financial transaction where received credits (receivables) are converted into cash, often through collections or sales.
- Comprehend and compute accrued expenses.
Verified Answer
ZK
Zybrea KnightJun 04, 2024
Final Answer :
False
Explanation :
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 will not occur until January 6 of the following year.
Learning Objectives
- Comprehend and compute accrued expenses.