Question

What entries are required to record $45,000 in salaries earned between March 27 and March 30 but not paid until April 6?

A. Debit salary payable, credit payroll checking
B. Credit salary expense, debit salary payable
C. Credit salary expense, debit assets
D. Debit salary expense, credit salary payable

Answer 1

The correct entry is to D) debit salary expense and credit salaries payable for the $45,000 salaries earned but not yet paid. This follows the accrual basis of accounting.

Step-by-step explanation:

The correct journal entry to record the $45,000 in salaries earned between March 27 and March 30, but not paid until April 6, would be to debit salary expense and credit salaries payable.

This is because the company has incurred the expense in March, reflecting the employees' right to receive this amount for their work, even though the payment will be made in April.

The journal entry would be:

• Debit Salary Expense $45,000
• Credit Salaries Payable $45,000

This entry follows the accrual basis of accounting, which recognizes expenses when they are incurred (regardless of when the cash is actually paid) and recognizes revenues when they are earned (regardless of when the cash is received).