How much salary expense is accrued when gross salary for a week is $10,000 and accounting period ends on Thursday?

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Multiple Choice

How much salary expense is accrued when gross salary for a week is $10,000 and accounting period ends on Thursday?

Salaries are recorded as an expense when they are earned, not when paid. For a weekly salary of 10,000 that is earned evenly over a 7-day week, you accrue only the portion of the week that has elapsed by the end of the accounting period. Since the period ends on Thursday, four days of the week have passed (Monday through Thursday). The daily rate is 10,000 divided by 7, which is about 1,428.57. Four days’ worth is 4 × 1,428.57 = 5,714.28. So the accrued salary expense is 5,714.28, with the remaining salary to be recognized in the next period.

Salaries are recorded as an expense when they are earned, not when paid. For a weekly salary of 10,000 that is earned evenly over a 7-day week, you accrue only the portion of the week that has elapsed by the end of the accounting period. Since the period ends on Thursday, four days of the week have passed (Monday through Thursday). The daily rate is 10,000 divided by 7, which is about 1,428.57. Four days’ worth is 4 × 1,428.57 = 5,714.28. So the accrued salary expense is 5,714.28, with the remaining salary to be recognized in the next period.

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