Question

Company A owes its employees $1,000 for work performed during February. The amount will not be paid until March. What entry should Company A make at the end of February to record the amount owed?

O Debit Wages Expense $1,000
Credit Cash $1,000
O Debit Wages Expense $1,000
Credit Wages Payable $1,000
O There is no entry to record this event.
O Debit Wages Payable $1,000
Credit Wages Expense $1,000

Answer 1

Company A should debit Wages Expense and credit Wages Payable for $1,000 to accurately record the owed wages for work performed in February, to be paid in March.

option a is the correct

Step-by-step explanation:

The correct entry Company A should make at the end of February to record the amount owed is a debit to Wages Expense for $1,000 and a credit to Wages Payable for $1,000.

This is a basic accounting procedure where expenses are recorded in the period they are incurred, regardless of when the cash is actually paid out. Wages Expense is debited because the company has incurred the expense of the employees' work during February, reflecting an increase in expenses. Wages Payable is credited to establish the liability the company has, indicating an obligation to pay its employees in the future, which in this case is March.