Question

Dorchester Camping Supplies has accrued salaries of $300 on December 31. What adjusting entry will the company make on December 31?

A. Debit Salary Expense $300, Credit Cash $300
B. Debit Salaries Payable $300, Credit Cash $300
C. Debit Salary Expense $300, Credit Salaries Payable $300
D. Debit Cash $300, Credit Salaries Payable $300

Answer 1

The company will make an adjusting entry to debit Salary Expense and credit Salaries Payable for the accrued salaries on December 31.

Step-by-step explanation:

The correct adjusting entry that Dorchester Camping Supplies will make on December 31 for the accrued salaries of $300 is option C. Debit Salary Expense $300 and Credit Salaries Payable $300.

This is because the company has accrued salaries, meaning that the salaries have been earned by the employees but have not been paid yet. To record this, the company debits Salary Expense to recognize the expense and credits Salaries Payable to show the amount owed.

Option A (Debit Salary Expense $300, Credit Cash $300) would be incorrect because the salaries have not been paid in cash yet, so Cash should not be credited.

Option B (Debit Salaries Payable $300, Credit Cash $300) would also be incorrect because the company has not paid the salaries yet, so Cash should not be credited either.

Option D (Debit Cash $300, Credit Salaries Payable $300) would be incorrect because the company has not paid the salaries yet, so Cash should not be debited either.