Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 32 - No. 33)
If a company owes salaries to its employees at the end of the accounting period, but has not yet paid them, what type of entry is required?
An adjusting entry for prepaid expenses.
An adjusting entry for accrued expenses.
A reversing entry.
A closing entry.
Explanation
An adjusting entry is used to recognize the salaries expense and the related liability.
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