Question

Demski Company pays its employees on the 1st and 15th of each month. It is March 31 and Demski is preparing financial statements for this quarter. Its employees have earned $96,000 since the 15th of March and have not yet been paid. How will Demski’s balance sheet and income statement reflect the accrual of wages on March 31?

Answer 1

Answer:

Explanation:

In the given transaction, it would impact the income statement and the balance sheet in the increment manner

That means The income statement would increase by $96,000 as it reflect the wages expense in the debit side of the income statement

And, the balance sheet would increase by $96,000 as it reflect the wages payable in the credit side of the balance statement under the current liabilities side of the balance sheet