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25 July, 04:15

Karl Company accrued wages of $7,350 that were earned by employees unpaid at the year-end. Assuming Karl uses reversing entries, which of the following entries correctly reverses the accrued wages at the beginning of the following year? A. Debit Wages Expense $7,350; credit Cash $7,350.

B. Debit Wages Expense $7,350; credit Wages Payable $7,350.

C. Debit Wages Payable $7,350; credit Cash $7,350.

D. Debit Cash $7,350; credit Wages Expense $7,350.

E. Debit Wages Payable $7,350; credit Wages Expense $7,350.

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Answers (1)
  1. 25 July, 05:50
    0
    E. Debit Wages Payable $7,350; credit Wages Expense $7,350.

    Explanation:

    The journal entry for recording the accrued wages is shown below:

    Wages expense A/c Dr $7,350

    To Wages payable A/c $7,350

    (Being the accrued wages is recorded)

    Now the reversing entry is

    Wages payable A/c Dr $7,350

    To Wages expense A/c $7,350

    (Being the reversing entry is made)

    Hence, the correct option is E.
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