Another Question: The company's policy is to pay its employees every Friday/ Since December 31 fell on a Wednesday, there was an accrued liability for salaries amounting to $2,400
a. Record the necessary adjusting journal entries on December 31, 2011
b. By how much did the companies net income increase or decrease as a result of the entries performed in part
(Ignore Income Taxes)
This is what I have for number 6 and a. Not sure if 6 is a question?
salaries expense 2400
salaries payable 2400
b.net income decrease by 2400 since we are recording all of the salaries owed december 31st and before and paying it afterwards on friday which would result in the trasaction debiting payable and crediting cash
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