Use this information to answer the following question. Panadora Company has the following information for the pay period of January 1-15,2014.Payment occurs on January 20.

-The entry to record the payroll would include a
A)debit to Salaries Payable for the net amount.
B)credit to State Unemployment Tax Payable.
C)debit to Salaries Expense for the amount paid to the employees.
D)debit to Salaries Expense for the gross payroll.

Question

Use this information to answer the following question. Panadora Company has the following information for the pay period of January 1-15,2014.Payment occurs on January 20.
 
-The entry to record the payroll would include a
A)debit to Salaries Payable for the net amount. 
B)credit to State Unemployment Tax Payable. 
C)debit to Salaries Expense for the amount paid to the employees. 
D)debit to Salaries Expense for the gross payroll.

Quizplus · Accepted Answer

The entry to record payroll would include a debit to Salaries Expense for the gross payroll, as this reflects the total amount earned by employees. The entry would also include credits to various payroll taxes (such as State Unemployment Tax Payable) and a credit to Cash for the net amount paid to employees. Finally, a debit would be made to any employee deductions, such as for health insurance or retirement accounts. However, the question specifically asks for the initial entry to record payroll, which would only include the gross payroll amount. Therefore, choice D is the best answer.

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