Which of the following journal entries is correct when a company has incurred an expense for work performed but has not yet paid for theses wages to employees?
A)Wages expense xxx
Operating income
Xxx
B)Wages expense xxx
Accrued expenses payable
Xxx
C)Accrued expenses payable xxx
Cash
Xxx
D)Retained earnings

Question

Which of the following journal entries is correct when a company has incurred an expense for work performed but has not yet paid for theses wages to employees?
A)Wages expense xxx
Operating income
Xxx
B)Wages expense xxx
Accrued expenses payable
Xxx
C)Accrued expenses payable xxx
Cash
Xxx
D)Retained earnings

Quizplus · Accepted Answer

When a company incurs an expense for work performed but has not yet paid for the wages to employees, an accrued expense is created. Therefore, the correct journal entry would be to debit Wages Expense and credit Accrued Expenses Payable. This accrual makes sure that the expenses are recorded in the correct accounting period. Option A is incorrect as it does not account for the outstanding amount or create an accrued expenses payable. Option C is incorrect as it assumes that the company has already paid the wages. Option D is not a relevant option as it does not account for the accrued expenses.

Which of the Following Journal Entries Is Correct When a Company