Asked by Larry Egerton on Jul 04, 2024
Verified
Before an adjusting entry is made to accrue employee salaries,Salaries Expense and Salaries Payable are both understated.
Accrue Employee Salaries
The process of recognizing the cost of salaries earned by employees but not yet paid to them.
Salaries Expense
An income statement item representing the total amount paid to employees in the form of salaries and wages during an accounting period.
Salaries Payable
A liability account that records the amount of salaries owed to employees but not yet paid.
- Understand the significance of adjusting entries in accurately representing a company's financial condition and performance.
- Acquire knowledge of the intent and outcomes of specific adjusting entries, notably for unearned revenues, accrued expenses, and depreciation.
Verified Answer
YA
Yvetta AutryJul 09, 2024
Final Answer :
True
Explanation :
This is because the salaries earned by the employees have not yet been recorded in the accounting records. As a result, Salaries Expense is understated and the corresponding liability, Salaries Payable, is also understated.
Learning Objectives
- Understand the significance of adjusting entries in accurately representing a company's financial condition and performance.
- Acquire knowledge of the intent and outcomes of specific adjusting entries, notably for unearned revenues, accrued expenses, and depreciation.
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