Question

Acme Co. pays its sales associates based on sales for each week on friday Wages and commission are paid at the end of the month. Sales associates are paying we can salary of 1000 and a commission of 10% for sales made that week if Acme co accrues wages and commissions for 10 employees every Friday and sales $100000 which of the following journal entries is correct for the payment of wages and accruemnent of commissions for the week?

Answer 1

For the accrual of wages and commissions for the week, Acme Co. records a journal entry by debiting Commission Expense and Wages Expense while crediting Accrued Commissions and Accrued Wages, respectively. This recognizes earned amounts for payment at the end of the month.

To accrue wages and commissions for the week, you would make the following journal entry:

1. Accrual of Commissions:

- Debit (Expense) Commission Expense

- Credit (Liability) Accrued Commissions

```

Commission Expense Dr.

Accrued Commissions Cr.

```

2. Accrual of Wages:

- Debit (Expense) Wages Expense

- Credit (Liability) Accrued Wages

```

Wages Expense Dr.

Accrued Wages Cr.

```

This entry recognizes the expense for the commissions and wages that have been earned by the employees during the week. The corresponding payment would be made at the end of the month when the actual disbursement occurs.