Ch. 3 - Accrual Accounting ConceptsWorksheetSee all chapters
All Chapters
Ch. 1 - Introduction to Accounting
Ch. 2 - Transaction Analysis
Ch. 3 - Accrual Accounting Concepts
Ch. 4 - Merchandising Operations
Ch. 5 - Inventory
Ch. 6 - Internal Controls and Reporting Cash
Ch. 7 - Receivables and Investments
Ch. 8 - Long Lived Assets
Ch. 9 - Current Liabilities
Ch. 10 - Time Value of Money
Ch. 11 - Long Term Liabilities
Ch. 12 - Stockholders' Equity
Ch. 13 - Statement of Cash Flows
Ch. 14 - Financial Statement Analysis
Ch. 15 - GAAP vs IFRS
Accrued Expenses

Concept #1: Adjusting Journal Entries: Accrued Expenses

Practice: Wait-2-Pay, Inc. has an employee that works every day of the year for $100 per day. W2P pays its employee once per month on the 25th of the month. The company is preparing its December 31 financial statements. The entry to adjust for accrued salary expense would include:

Accrued Expenses occur when we receive the benefits of an expense, but have not paid for the expense yet. The account titles for Accrued Expenses can be written two ways. As an example, let's use wages earned by an employee, but not paid yet. This account could be written as "Accrued Wage Expense" or "Wages Payable." Both are correct!