Question

what is the difference between wages payable and wage expense

Answer 1

Wages payable is a liability account, whereas wage expense is an expense account. Both may or may not have same amount.

Wages payable's normal balance is credit, whereas wages expense's normal balance is debit

Wages payable is a balance sheet account, whereas wages expense is an income statement account.

Wages payable will be recorded only in adjusting entry, whereas wages expense will be recorded both in journal and adjusting entry.

Example: Company paid $400 to its labors.

Journal Entry: Debit wages expense and credit cash with $400.

Example: Company's employees has earned $400 but not yet received payment as at December 31.

Adjusting entry: Debit wages expense and credit wages payable with $400.