Assume that no reversing entries are made by this firm. If wages of $11 200 were accrued by it at the end of the year and the first payment of wages in the subsequent year was $101 600 how would this payment be recorded?
A) Debit salaries payable $11 200; debit salaries expense $90 400; credit cash $101 600
B) Credit salaries payable $11 200; debit salaries expense $112 800; credit cash $101 600
C) Debit salaries payable $11 200; debit salaries expense $101 600; credit cash $112 800
D) Debit salaries expense $90 400; credit cash $90 400

Question

Quizplus · Accepted Answer

The payment of $101,600 would first settle the accrued wages of $11,200 (debit salaries payable to remove the liability) and the remaining $90,400 would be recorded as salaries expense for the new period (debit salaries expense). The total payment made is credited to cash, totaling $101,600.

Assume That No Reversing Entries Are Made by This Firm