Where should I enter unpaid wages?

Definition of Unpaid Wages

Unpaid wages are usually the amounts that hourly-paid employees have earned, but have not yet been paid to the employees.

Entering Unpaid Wages

Under the accrual basis of accounting, unpaid wages that have been earned by employees but have not yet been recorded in the accounting records should be entered or recorded through an accrual adjusting entry which will:

  • Debit Wages Expense
  • Credit Wages Payable or credit Accrued Wages Payable

Wages Expense is an income statement account. Wages Payable or Accrued Wages Payable is a current liability account that is reported on the balance sheet.

Free Financial Statements Cheat Sheet

0
Subscribers
You are already subscribed. This offer is not available to existing subscribers.
Error: You have unsubscribed from this list.
Step 2: Please check your email.