Answered: XYZ company paid their employees $1000…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Related questions

Question

XYZ company paid their employees $1000 for wages this week for work done this week. The journal entry would include:

Group of answer choices

Credit to Wage Expense of $1000

Debit to Wages payable of $1000

Debit to Cash of $1000

Debit to Wage Expense of $1000

Expert Solution

Step 1

>The problem is based on Matching Concept of accounting, read with accrual system of accounting.

>The accrual system of accounting states that a transaction is to be recorded when incurred, which means that Revenues are to be recorded when earned, and expenses are recorded when incurred, whether any cash has been received or not or cash has been paid or not.

>The matching concept states that the cost for the period are to be recorded in a way that they match with the revenue they helped generate for that period.