Accrued Wages – MCQ

Practice Question

Intro to Financial Accounting
Operating Decisions and the Accounting System
Adjustments and Quality of Earnings
MCQs

Which account would be affected by an adjusting entry for accrued wages at the end of the accounting period?

  1. Accounts Receivable
  2. Cash
  3. Unearned Revenue
  4. Wages Payable
Answer +
Correct Answer: D
Explanation +

At the end of an accounting period, if employees have earned wages that haven’t yet been paid, an adjusting journal entry is required to match the expense with the period it was incurred.

The entry involves a debit to Wages Expense and a credit to Wages Payable, reflecting the liability owed to employees. This ensures the income statement and balance sheet both accurately reflect the company's obligations and incurred costs.