The Entry To Adjust The Accounts For Salaries Accrued At The End of The Accounting Period Is What?

 

The entry to adjust the accounts for Expenses Accrued such as Salaries Accrued, Wages Accrued, Rent Accrued or any other expenses accrued at the end of the accounting period is recorded by a debit to relevant expense accounts i.e., Salaries Expense Account, etc., and a credit to relevant expenses accrued account such as salaries accrued account, etc.

In Journal Entry form, we can show as below:

                                                           (For Salaries Expense)

                                                              Salaries Expense a/c  XXX

 

                                                                                                  Accrued Salaries a/c XXX

 

                                                                      (Salaries Accrued For the Period)

 

For wages expense account & accrued ant rent expense & accrued account, just replace the word, “salaries” in the above adjusting entry.

The effect of this adjusting entry is that the amount of salaries expense account is increased in Income Statement and as a result, the net income decreases while accrued salaries, outstanding salaries or salaries payable as the current liabilities on balance sheet increased and hence liabilities & equity side of balance sheet also increased.

These types of adjusting entries are the requirements of Accrual Basis of Accounting in which business transactions are recorded whether the cash is received, paid or not.