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-   -   Confused on Salaries Payable/Salaries Expense (https://www.askmehelpdesk.com/showthread.php?t=447751)

  • Feb 16, 2010, 09:04 AM
    xCloudx
    Confused on Salaries Payable/Salaries Expense
    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.
  • Feb 16, 2010, 09:21 AM
    ROLCAM

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

    Originally Posted by ROLCAM View Post
    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?
  • Feb 16, 2010, 03:20 PM
    dcowboys107
    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.

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