Which entry records accrued wages?

• A. Debit Wages Payable; Credit Cash.
• B. Debit Cash; Credit Wages Expense.
• C. Debit Wages Expense; Credit Wages Payable.
• D. Debit Wages Revenue; Credit Wages Expense.

Answer: (C)

When wages are earned but not yet paid, you record an accrued expense and a payable. Debiting Wages Expense increases the expense for the period, and crediting Wages Payable creates a liability for the amount owed. This matches the accrual basis of accounting, which recognizes costs when incurred and records a corresponding obligation.

If the company later pays the wages, the entry would switch to settling the liability: Debit Wages Payable and Credit Cash, removing the liability and reducing cash.

The other options don’t reflect the accrual moment: paying wages would debit Wages Payable and credit Cash, not record the accrual; debiting Cash and crediting Wages Expense misstates both cash and the expense; and debiting Wages Revenue with crediting Wages Expense mixes income and expense inappropriately.