Module 2 discussion- ACT350 - The wages earned during the first three days of the week(the end of the month represent an accrued expense and a related

Module 2 discussion- ACT350 - The wages earned during the...

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The wages earned during the first three days of the week (the end of the month) represent an accrued expense and a related liability to the company. The matching principle requires a company to match expenses to revenue in the same accounting period. If the accrued wages were not recorded in the correct accounting period, the wages expense would be understated in the Income Statement resulting in the Revenue being overstated. In addition, the Wages Liability account would be understated in the Balance Sheet. To explain my journal entries I will make some assumptions.

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