What is the journal entry to record paying salaries of 5,000 for the period?

• A. Debit Cash; Credit Salaries Expense
• B. Debit Salaries Expense; Credit Accounts Receivable
• C. Debit Prepaid Salaries; Credit Cash
• D. Debit Salaries Expense; Credit Cash

Answer: (D)

Paying salaries is recorded as an expense and a cash outflow. When the company pays 5,000 in salaries, you debit Salaries Expense to reflect the cost incurred for the period and credit Cash to show the cash leaving the business. This increases the expense on the income statement, which reduces net income, and decreases the cash asset on the balance sheet, accurately matching the event of paying employees. Other entries would misstate the accounts involved or the direction of the change (for example, increasing cash, or touching an asset like Prepaid Salaries instead of recognizing the current period expense).