Final answer:
The correct entry to record monthly salaries earned by management is option a) Debit Salaries Expense, credit Salaries Payable, reflecting the accrual of the expense.
Step-by-step explanation:
To correctly record the monthly salaries earned by the top management of a manufacturing company, the appropriate journal entry is: Debit Salaries Expense, credit Salaries Payable. This entry assumes that the salaries have been earned by the employees but not yet paid, which is often the case at the end of an accounting period when preparing for financial statements.
Option (a) Debit Salaries Expense, credit Cash would be used if the salaries have been paid in cash immediately. However, typically, there is a time lag between when salaries are earned and when they are paid.
Option (c) Debit Salaries Payable, credit Cash is used at the time of payment when cash is paid out to settle the liability created by the salaries payable. Finally, option (b) Debit Cash, credit Salaries Payable is not a correct entry under any standard accounting practices, as it implies you are increasing cash when recording salaries, which is not the case.
In short, the correct journal entry reflects the accrual of the expense when the salaries are earned, prior to the actual discharge of the cash payment. It is important to capture these amounts accurately to ensure that the financial statements present a true and fair view of the company's financial position and performance.