Expert: Arthur Naman - 10/15/2008

Question
i am having trouble figuring out the amount to debit and credit to certain accounts.
Victor hast two employees who each get paid $150/day. Dec 31st is a Wed. These two employees will not be pain until friday Jan 2nd. How much do i debit to salary expense?

Answer
Your scenario is vague, not clear. I presume your are asking about the salary expense at Dec. 31, year end.

On the cash basis, the answer is zero as expenses are not accrued. The wages paid on Jan. 2 are expenses of the next year.

On an accrual basis the answer is the wages as of Dec. 31 which would then be paid Jan. 2, the next pay date. As to how much the answer depends on the number of days worked in the pay period ending Wednesday, Dec. 31.

In any cash, the amount to debit is normally the gross wages to be paid, before any reduction for payroll taxes.