Salary Expense Adjusting Entry

To cash bank rs 1 00 000. This video walks through an salary expense salary payable adjusting entry problem including the why behind the adjusting entry.

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An adjusting entry was made to record 2 000 of accrued salaries at the end of 20x3.

Salary expense adjusting entry. An adjusting entry is made at the end of accounting period for converting an appropriate portion of the asset into expense. The pro forma adjusting entry to record an accrued expense is. In this financial accounting tutorial i begin explaining adjusting entries and how they are either revenue or expense adjustments never involve cash and are prepared at the end of an accounting period passage of time.

Monthly salaries 55 000 unpaid days 2 accrued salaries monthly salaries x 12 x unpaid days 365 accrued salaries 55 000 x 12 x 2 365 3 616 accrued salaries journal entry at the end of the month the business needs to record the unpaid salaries for that period with the accrued salary expense journal entry is as follows. When you pay salary in the month of january you need to pass following entry. This is a common and ofte.

Adjusting entries allow you to adjust income and expense totals to more accurately reflect your financial position. This outstanding expenses must be brought into account before the preparation of the final accounts by means of adjusting entry. X for the first quarter of the of year.

Appropriate expense account such as utilities expense rent expense interest expense etc. The entry on that date required a debit to salaries payable for the 2 000 accrued at the end of 20x3 and salaries expense for 3 000 earned by employees during 20x4. After you prepare your initial trial balance you can prepare and post your.

Multiply the number of days by the accrued salary expense per day to calculate total accrued expense. Example on january 01 2015 the moon company paid 9 000 as advance rent of the head office building to mr. In the example the accrued expense for the three day period is 1 032 times 3 or 3 096.

These type of adjusting entries for salary are to be passed for all the 12 months if not paid on or before the end of the month. That is the double effect of the adjustment is. For instance trial balance shows salary of rs 15 000 but salary of rs 1 000 for the month of december 2004 has not been paid till 31 12 2004.

This first adjustment example will include salaries expense and a payable being accrued. The next payday occurred on january 15 20x4 when 5 000 was paid to employees.

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