A Business Pays Salaries of $140,000 on the First and Fifteenth

question 135

Essay

A business pays salaries of $140,000 on the first and fifteenth day of every month.Which of the following is the adjusting entry required on December 31,2011?
A) A debit $140,000 to Salaries expense and a credit $140,000 to Salaries payable.
B) A debit $140,000 to Salaries receivable and a credit $140,000 to Salaries payable.
C) A debit $140,000 to Salaries expense and a credit $140,000 to Salaries receivable.
D) No adjusting entry is required.

• A) A debit $140,000 to Salaries expense and a credit $140,000 to Salaries payable.
• B) A debit $140,000 to Salaries receivable and a credit $140,000 to Salaries payable.
• C) A debit $140,000 to Salaries expense and a credit $140,000 to Salaries receivable.
• D) No adjusting entry is required.

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Definitions:

Investment

The process of allocating resources, usually money, with the expectation of generating an income or profit.

Vigilant Investors

Active and informed investors who closely monitor their investments and market conditions to protect and grow their portfolio.

Efficient Operation

A mode of functioning in which a system uses the smallest amount of input resources to achieve the highest amount of output.

Net Return

The total earnings from an investment after subtracting all costs and expenses, indicating the actual financial gain.