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.