Question

If accrued salaries were recorded on December 31 with a credit to Salaries Payable, the entry to record payment of these wages on the following January 5 would include:Select one:a. A debit to Cash and a credit to Salaries Payable.b. A debit to Cash and a credit to Prepaid Salaries.c. A debit to Salaries Payable and a credit to Cash.d. A debit to Salaries Payable and a credit to Salaries Expense.e. No entry would be necessary on January 5.

Answer 1

Answer:

c. A debit to Salaries Payable and a credit to Cash.

Explanation:

As on December 31, entry to record the expense of Salaries which is accrued and not paid is

Salary A/c Dr.                

  To Salaries Payable

Now on the closing date, of previous year there is a liability outstanding of Salary Payable.

In the next year on 5th January the salary outstanding in opening balance sheet is paid.

For this, the payment will be made and accordingly, cash will be reduced.

Accordingly liability will be reduced for this, liability will be debited.

Therefore, correct option is

c. A debit to Salaries Payable and a credit to Cash.