Question

After the adjustments have been completed, the balance in the "Salaries and Wages Expense" account represents ____.

A) Total salaries and wages paid during the current period
B) Total salaries and wages incurred but not yet paid
C) Total salaries and wages accrued during the current period
D) Total salaries and wages budgeted for the next period

Answer 1

The balance in the "Salaries and Wages Expense" account after adjustments represents total salaries and wages accrued in the current period, aligning with the principles of accrual basis accounting.

Step-by-step explanation:

After the adjustments have been completed, the balance in the "Salaries and Wages Expense" account represents total salaries and wages accrued during the current period. This includes all the compensation that employees have earned, regardless of whether it has been paid out or not by the end of the accounting period.Adjustments are usually made in accrual basis accounting to ensure that expenses are recognized in the period they are incurred. The account thus reflects the true obligation of the business to its employees for services performed during that time.

This means that the expenses for salaries and wages incurred during the period, but not yet paid, are included in this balance. It reflects the amount that the company owes to its employees for their work during the period.For example, if a company has $10,000 in the 'Salaries and Wages Expense' account after adjustments, it means that $10,000 worth of salaries and wages have been earned by the employees but not yet paid out.