Accrued Wages Journal Entry With Example

Accrued Wages are Current Liabilities on Balance Sheet and these are the examples of Accrued Liabilities. Accrued Wages are also known as Wages Payable.

These are created in case of unpaid wages eventhough these are earned by the workers during the accounting period. For Example, if a company does not pay to workers of the business eventhough they are done the work, then these wages which are earned by workers become the Current Liability for the company. In that case, the company need to record following Adjusting Journal Entry for Accrued Wages for the period as shown below:

                                                     Wages a/c   XXX

                                                                     Accrued Wages a/c   XXX

(Wages Outstanding at the End of Accounting Period)

Also Read Out, “Accrued Salaries Journal Entry”

When the company actually paid wages, that is an Expense for company, to workers, then accrued wages are reversed by passing reversing entry as now these no longer be the Liability of the company. The Journal Entry for wages paid for cash is recorded as shown below:

                                               Wages Expense a/c    XXX

                                                                            Cash a/c   XXX

       (Paid Wages To Workers)

Wages Payable Debit Or Credit

Wages Payable is Credited normally as it is the expenses payable by the business to workers for the amount of work done by them during the accounting period. When the wages are actually paid to workers, then these are debited in order to close it.