Expenses sometimes make their contribution to revenue in a different period than when they are paid. When salaries and wages are incurred in one period and paid in the next period this often leads to which account appearing on the balance sheet at the end of the time period?
A) Due from Employees.
B) Due to Employer.
C) Salaries and Wages Payable.
D) Salaries and Wages Expense.

Question

Quizplus · Accepted Answer

Salaries and wages are incurred (earned) in one period but paid in the next period, so they are considered an expense in the period they are earned. Therefore, salaries and wages payable is the appropriate account to appear on the balance sheet at the end of the time period because it represents the amount owed to employees for work already performed but not yet paid for. Due from Employees and Due to Employer do not accurately reflect the situation and Salaries and Wages Expense has already been recognized as an expense in the period they were incurred.

Expenses Sometimes Make Their Contribution to Revenue in a Different