Accrued Salaries Payable Journal Entry

Journal Entry Question and Answer

by Aekeshra
(Delhi, Republic of india)

India Gate, Delhi<br>(national monument)

India Gate, Delhi
(national monument)

Before you begin: It's important for testing and exams to make sure you not only reply questions correctly merely as well consummate them at the right speed. Grab a pen and slice of paper and time yourself while attempting this exercise.

Difficulty Rating:
Intermediate --> Advanced

Time limit:
15 minutes

Question:

Record the journal entries for the following:

one - Business organisation started with cash 8,000 and constitute & machinery 3,000.
2 - Stock purchase for sale (cash purchase) = 3,000, credit purchase = five,000
3 - Wages paid 120,000 (including 20,000 relating to a future year).
iv - Salaries paid 200,000 just due 110,000.
five - Sales made for cash 600,000 and on credit 800,000.
vi - Depreciation 10 percent on found & mechanism.
seven - Goods costing xx,000 destroyed by fire.
8 - Payment made to creditors to the value of 200,000 at ten percent discount.

Solution:

plant and machinery one. Dr Cash 8,000
Dr Found and mechanism three,000
Cr Capital letter 11,000

2. Dr Purchases 8,000
Cr Greenbacks 3,000
Cr Creditors v,000

iii. Dr Wages (expense) 100,000
Dr Prepaid Wages (asset*) 20,000
Cr Cash 120,000

*Note that this is called a

prepayment . A prepayment of a future expense is an nugget and is counted as function of debtors - this is because y'all paid the expense before you should accept, and so it's like your business is owed the money right now for paying to early on.

Annotation that prepayments are not really covered on this website, just I do go over

them in my accounting books. 4. Dr Salaries (200,000 + 110,000) 310,000
Cr Cash 200,000
Cr Salaries owing 110,000

Equally far equally I sympathize, for journal 4 above, the salaries of 200,000 were actually paid but another 110,000 are nevertheless outstanding (salaries "due" means "owed" or "outstanding").

5. Dr Cash 600,000
Dr Debtors 800,000
Cr Sales 1,400,000
6. Dr Depreciation (iii,000 x 0.one) 300
Cr Accumulated Depreciation 300

vii. Dr Loss due to burn (expense) 20,000
Cr Purchases/Cost of Appurtenances Sold 20,000

In the journal entry in a higher place, an expense has to be recorded to bear witness the loss. And equally a contra entry confronting this, we have to reduce our purchases account (it is purchases for the

periodic system of inventory ) or inventory account (for the perpetual organization ).

In the end of the twenty-four hour period the debit to purchases or inventory both mean less

price of goods sold to exist shown in the income statement . 8. Dr Creditors 200,000
Cr Cash 180,000
Cr Discount Received (200,000 x 0.i) xx,000

The 10% discount which comes to 20,000 is counted as an income for the business. Of course, only 180,000 is really paid. This cancels out the entire debt to creditors of 200,000.

Greatful cheers to Manish Kothari and other contributors below for helping to solve this question.

Best,
Michael Celender
Founder of Bookkeeping Basics for Students