Wages payable debit or credit?
Understand the Problem
The question is asking whether 'wages payable' is recorded as a debit or a credit in accounting. In accounting, wages payable is a liability account, which means it typically has a credit balance and therefore would be credited when recording wages that the company owes but has not yet paid.
Answer
Wages payable is a credit when owed, debit when paid.
The final answer is that wages payable is recorded as a credit when wages are owed but not yet paid, and as a debit when the wages are eventually paid.
Answer for screen readers
The final answer is that wages payable is recorded as a credit when wages are owed but not yet paid, and as a debit when the wages are eventually paid.
More Information
Wages payable is a current liability account that represents amounts owed to employees for work performed but not yet paid. This is important for accurately representing a company’s financial obligations.
Tips
Common mistakes include misunderstanding when to record wages payable as a credit or debit. Ensure wages payable is credited when wages are recorded and unpaid, and debited upon payment.
Sources
- Wages Payable - Balance Sheet Liability - Wall Street Prep - wallstreetprep.com
- What are wages payable? - accountingcoach.com
- Wages payable definition - AccountingTools - accountingtools.com
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