When employees actually use their vacation time a. Vacation Benefits Expense is debited, and Vacation Benefits Payable is credited. b. Vacation Benefits Payable is debited. c. Vacation Benefits Payable is credited. d. Wages Expense is debited and Cash is credited.

Question

Business

Katelynn Wallace

29 September, 14:37

When employees actually use their vacation time a. Vacation Benefits Expense is debited, and Vacation Benefits Payable is credited. b. Vacation Benefits Payable is debited. c. Vacation Benefits Payable is credited. d. Wages Expense is debited and Cash is credited.

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Answers (1)

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Amy Austin · Answer 1

The correct answer in this case would be option d. or Wages Expense is debited and Cash is credited.

Explanation:

Now, considering that the vacation time of the employees already comes under the paid vacation leaves, it will be automatically registered or recorded in the respective accounting books. As the employer has to pay the wages or salaries to the employees during the their vacation, the Wages benefit account is debited and the Cash that it has to pay to the employee is credited. This accounting entry basically implies that the employer has to pay the outstanding wages to the employees to use their vacation time which implies as an increase through debit and cash outflow which the company has to pay to the employees which is understandably recorded as credit.