A company made no adjusting entry for accrued and unpaid employee salaries of $9,000 on December 31. The entry to record the adjusting entry should have been:
A) debit Salary Expense, $9,000; credit Cash, $9,000
B) debit Salary Expense, $9,000; credit Fees Earned, $9,000
C) debit Salary Expense, $9,000; credit Prepaid Salary, $9,000
D) debit Salary Expense, $9,000; credit Salaries Payable, $9,000
E) debit Salaries Payable, $9,000; credit Salary Expense

Question

Quizplus · Accepted Answer

The adjusting entry to record accrued and unpaid employee salaries would be to debit Salary Expense, reflecting the expense that has been incurred by the company for the salaries, and credit Salaries Payable, which represents the liability that the company owes to its employees for their unpaid compensation. This entry reflects the matching principle of accounting, which requires that expenses be recognized in the same period as the revenues that they help to generate, and also ensures that the balance sheet accurately reflects the company's liabilities. The other options do not properly account for the accrued and unpaid employee salaries.

A Company Made No Adjusting Entry for Accrued and Unpaid