Question

As the controller of Chardon​ Consulting, you have hired a new​ employee, whom you must train. She objects to making an adjusting entry for accrued salaries at the end of the period. She​ reasons, "We will pay the salaries soon. Why not wait until payment to record the​ expense? In the​ end, the result will be the​ same." Write a reply to explain to the employee why the adjusting entry is needed for accrued salary expense.

Answer 1

Step-by-step explanation:

In this case, it is incorrect to wait until payment to record the expense, as organizational accounting is essential in an organization so that there is a record and control of organizational financial transactions so that companies can obtain information about the business and take reasoned decisions based on the current reality of the company.

Therefore, all income and expenses for the period must be recorded in accounting so that there is real information about an organization's movements in a period.