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When using the accrual method of accounting, expenses are recognized when they're incurred, rather than when they are paid. Consequently, wage expense (or almost any expense, for that matter) is recognized in the period during which it was incurred, in this case, when it was earned by the employee.
Depending on the manner in which people are paid, on any given balance sheet date (usually the last day of each month), there may be wages earned, but which won't be paid until the beginning of the next month, i.e. the next pay date. Therefore, at the end of the month, we "accrue" the unpaid wages to recognize the expense incurred. This ensures the expense is reported in the proper period.
A similar concept applies to revenues using the accrual basis of accounting.
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Are wage expense considered a current liability?
Generally NO, wages are an expense. The only exception to the rule is if a company has "wages payable" which is wages that they owe but have not yet paid, "wages payable" is a liability until they are paid. Once paid, the account is closed into wage expense and is listed under the asset column of the Trial Balance sheet, until the end of the accounting cycle when expense accounts are closed out for the year end.
What liability account would hold the balance of wages due but not yet paid Wage Expense Prepaid Wages or Wages Payable?
Wages Payable Payable accounts holds amount owned but not yet paid.
Show me How do you prepare an income statement?
fees earned-950,000 office expense -222,000 miscellaneous expense-16,000 wage expense-478,000
Which account shows the total gross earnings that the employer incurs as an expense each payday?
The account that shows the total gross earnings that the employer incurs as an expense each payday is typically referred to as "Payroll Expense" or "Wage Expense." This account includes all gross wages, salaries, and any additional compensation before deductions such as taxes and benefits. It reflects the total cost to the employer for labor during the pay period.
What is the journal entry for wages paid?
Db wage expense Cr cash
What is wages inward and outward?
wage inward is a direct expense shown in Trading Account whereas wage outward is an indirect nature of expense debited to Profit & loss account.
Are wage expense considered a current liability?
Generally NO, wages are an expense. The only exception to the rule is if a company has "wages payable" which is wages that they owe but have not yet paid, "wages payable" is a liability until they are paid. Once paid, the account is closed into wage expense and is listed under the asset column of the Trial Balance sheet, until the end of the accounting cycle when expense accounts are closed out for the year end.
What liability account would hold the balance of wages due but not yet paid Wage Expense Prepaid Wages or Wages Payable?
Wages Payable Payable accounts holds amount owned but not yet paid.
What is journal entry for Paid wages?
Db wage expense Cr cash
Show me How do you prepare an income statement?
fees earned-950,000 office expense -222,000 miscellaneous expense-16,000 wage expense-478,000
Which account shows the total gross earnings that the employer incurs as an expense each payday?
The account that shows the total gross earnings that the employer incurs as an expense each payday is typically referred to as "Payroll Expense" or "Wage Expense." This account includes all gross wages, salaries, and any additional compensation before deductions such as taxes and benefits. It reflects the total cost to the employer for labor during the pay period.
What is the journal entry for wages paid?
Db wage expense Cr cash
Do you debit wage payable or wage expense?
Wage expense
How is wage garnishment determined for a judgment awarded in a lawsuit for an insurance claim?
Wage garnisment laws are enacted by states. A federal law also protects wages earned that fall beneath minimum wage allotment. The amount of garnishment enforced depends on the amount of wages earned and the state laws.
What is the plural for of wage?
The plural of wage is wages.
What is the plural for wage?
The plural of wage is wages.
What is last wage earned?
last wage earned?
