Concept explainers
(a)
Accrued Expenses
Accrued expense refers to the expenses those are unpaid, but the goods and services related to the payment are received in a particular accounting period. These accrued expenses are payable for the business. Business treats accrued expenses as a liability.
Adjusting entries indicates those entries, which are passed in the books of accounts at the end of one accounting period. These entries are passed in the books of accounts as per the revenue recognition principle and the expenses recognition principle to adjust the revenue, and the expenses of a business in the period of their occurrence.
Rule of Debit and Credit:
Debit - Increase in all assets, expenses & dividends, and decrease in all liabilities and
Credit - Increase in all liabilities and stockholders’ equity, and decrease in all assets & expenses.
To record: The adjusting entry for the accrued salary for the period ending on Wednesday.
(b)
To record: The adjusting entry for the accrued salary for the period ending on Thursday.
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Chapter 3 Solutions
Financial & Managerial Accounting
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