Question

It the end of the accounting period on December 31, 2022, Rose Industries records wages payable of $42,500. For the same accounting period, Romero Industries does not need to record wages payable. Why?

Answer 1

The end of the accounting period fell on a payday for Romero Industries but not for Rose Industries.

Explanation:

Unpaid wages are normally the percentages paid to hourly employees but not yet charged to employers.

According to the cumulative basis of accounting, outstanding wages received by workers but not yet deposited in their accounts must, through an accrual change entry to be entered or recorded:

• Debit Wages Expense
• Credit Wages Payable or credit Accrued Wages Payable

Expense of wages is an account of income statement. Wages Payable or Accrued Wages Payable is a current account with a balance sheet account documentation.