PRC-1 · Chapter 10 · Question 52 of 100
A business records a period-end adjusting entry for accrued wages amounting to Rs. 10,000. How is this adjustment reflected in the Adjusted Trial Balance and Financial Statements?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Increase wages expense by Rs. 10,000 and increase liabilities by Rs. 10,000.
Explanation
Accrued wages mean the business has incurred the expense but not yet paid it. The adjusting entry debits (increases) Wages Expense and credits (increases) Accrued Wages Liability.
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