Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

9. Current Liabilities

Payroll and Payroll Taxes

Financial Accounting

9. Current Liabilities

Payroll and Payroll Taxes

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Multiple Choice

When a company pays employees their salaries for the current period, which of the following is the correct journal entry?

Debit Salaries Expense; Credit Cash

Debit Salaries Expense; Credit Salaries Payable

Debit Cash; Credit Salaries Expense

Debit Salaries Payable; Credit Salaries Expense

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Verified step by step guidance

Understand the nature of the transaction: When a company pays employees their salaries for the current period, it is an expense incurred by the company, and cash is being reduced to settle this obligation.

Identify the accounts involved: The two accounts affected are 'Salaries Expense' (an expense account) and 'Cash' (an asset account).

Determine the impact on each account: Salaries Expense increases because it represents the cost of paying employees, and Cash decreases because the company is using cash to pay salaries.

Apply the rules of debits and credits: Expenses are increased with a debit, so 'Salaries Expense' is debited. Assets (like Cash) decrease with a credit, so 'Cash' is credited.

Write the journal entry: The correct journal entry is 'Debit Salaries Expense; Credit Cash' to reflect the payment of salaries for the current period.