Expenses sometimes make their contribution to revenue in a different period than when they are paid. When salaries and wages are incurred in one period and paid in the next period, this often leads to which account appearing on the balance sheet at the end of the time period?

Question

Business

Serenity Rasmussen

23 July, 20:35

Expenses sometimes make their contribution to revenue in a different period than when they are paid. When salaries and wages are incurred in one period and paid in the next period, this often leads to which account appearing on the balance sheet at the end of the time period?

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Answers (1)

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Mayo · Answer 1

The answer is: Salaries and Wages Payable

Explanation:

The accrual principle states that transactions must be recorded on the periods when they occur, and not necessarily when cash flows are associated with them.

This is basic and fundamental for recording expenses, they have to be recorded when they actually happen, not when they are paid for. For example, your company buys a new supplies this month but pays for them with a check due in 45 days. This operation must be recorded today, not in 45 days.