Question

A company pays each of its two office employees each Friday at the rate of $300 per day for a five-day week that begins on Monday. If the monthly accounting period ends on Tuesday and the employees worked on both Monday and Tuesday, the month-end adjusting entry to record the salaries earned but unpaid is:

Multiple Choice

Debit Unpaid Salaries $1,800 and credit Salaries Payable $1,800.

Debit Salaries Payable $1,200 and credit Salaries Expense $1,200.

Debit Salaries Expense $1,200 and credit Salaries Payable $1,200.

Debit Salaries Expense $1,800 and credit Salaries Payable $1,800.

Debit Salaries Expense $1,200 and credit Cash $1,200.

Answer 1

Salary is being paid on every friday of each week. On month end at tuesday which means salaries accrued for two days Monday & tuesday.

Net salary payable = 2(days)*2(employees)*300(rate)
= 1200

journal entry at the end of month would be as follows -

Salary expense A/c Dr. 1200

To Salary payable A/c 1200

Salary expense is an income statement item which that reduces the net income and salary payable is an balance sheet item comes in current liability account.

so the correct option would be option (c).

Please check with your answer and let me know.