Question

Powers Company accrued unpaid wages of $3000 on January 31. These wages will be included in...

Powers Company accrued unpaid wages of $3000 on January 31. These wages will be included in paychecks totaling $7000 on February 2. The reversing entry will include a(n):

Select one:

a. credit to Wages Expense for $3000

b. credit to Cash for $3000

c. debit to Wages Expense for $7000

d. debit to Wages Payable for $7000

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Answer #1

Accrued unpaid wages at January 31 = $3,000

The following adjusting entry will be made on January t1:

General Journal Debit Credit
Wages expense $3,000
Wages payable $3,000
( To record accrued unpaid wages )

The following reversing entry will be made on February 2 :

General Journal Debit Credit
Wages payable $3,000
Wages expense $3,000
( To record reversing entry of accrued unpaid wages )

The reversing entry will include a credit to Wages Expense for $3000 .

Correct option is a.

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