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xCloudx
Feb 16, 2010, 09:04 AM
Ok, I'm doing a comprehensive problem for my accounting class. For the first part, we're supposed to journalize and post the transactions. The only one I was confused on was this one:

July 20 Paid $1,600 for employee salaries.

In the journal, do I record it as this:
Date:
July 20
Acct. Title & Explanation:
Salaries Expense
Cash
(Paid Employee Salaries)
Debit:
1,600
Credit:
1,600

Or should Salaries Expense be changed to Salaries Payable? They give us a list of all the accounts to use and both Salaries Expense and Salaries Payable are one there, so I was confused on which one to use.

ROLCAM
Feb 16, 2010, 09:21 AM
1) You are quite correct.
2) Salaries Expense is the one.

xCloudx
Feb 16, 2010, 10:55 AM
1) You are quite correct.
2) Salaries Expense is the one.

So when would you use Salaries Payable? Just wondering, so I know when it comes up?

dcowboys107
Feb 16, 2010, 03:20 PM
Salaries Payable is when an employee has rendered service but has not received pay. The accounting principle says that revenue is earned when service performed. Once service or work has been done, revenue has been earned and expense incurred. So you would debit salaries expense and credit salaries payable.