The Structure of the Payroll Entry to Record the Payroll

question 90

Multiple Choice

The structure of the payroll entry to record the payroll is

• A) debit Wages Payable; credit each employee deduction.
• B) debit Wages Payable; credit Cash.
• C) debit Wages Expense; credit each employee deduction; credit Salaries Payable.
• D) debit Wages Expense; credit each employee deduction.
• E) debit Wages Payable; credit Sales Expense; and credit Cash.

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Definitions:

Compounded Semi-annually

Refers to the process of calculating interest on both the initial principal and the accumulated interest from previous periods twice a year.

Amortization Schedule

A table detailing each periodic payment on an amortizing loan (typically a mortgage), as well as how much of each payment is interest versus principal and the balance remaining after each payment.

Compounded Semi-annually

Interest calculation method where interest is added to the principal sum of a loan or deposit twice a year, resulting in interest earning interest.

Amortization Schedule

An amortization schedule is a table detailing each periodic payment on an amortizing loan, including amounts going towards principal and interest over the life of the loan.