Asked by Shawntay Williams on Jun 16, 2024
Verified
If an adjusting entry is made on the last day of the current accounting period by debiting Wages Expense and crediting Wages Payable for accrued wages earned but not yet paid, a reversing entry on the first day of the next accounting period will
A) debit Wages Expense and credit Wages Payable.
B) debit Cash and credit Wages Expense.
C) debit Miscellaneous Expense and credit Wages Expense.
D) debit Wages Payable and credit Wages Expense.
Wages Expense
This is the total amount of wages a company pays to its employees, which is considered an expense on the income statement.
Accrued Wages
Refers to wages earned by employees but not yet paid by the employer.
Reversing Entry
An accounting entry that is made at the beginning of an accounting period to reverse or cancel out adjusting entries made at the end of the previous period.
- Grasp the concept and application of reversing entries in the accounting process.
Verified Answer
TS
Tamlyn ShimizuJun 18, 2024
Final Answer :
D
Explanation :
A reversing entry is made to negate the effects of the adjusting entry made at the end of the previous period. Since the adjusting entry debited Wages Expense and credited Wages Payable, the reversing entry does the opposite: it debits Wages Payable and credits Wages Expense. This prepares the accounts for the actual payment of wages.
Learning Objectives
- Grasp the concept and application of reversing entries in the accounting process.