A company owes employee salaries of $16,000 at the end of the year. These salaries will be paid in the following year. What adjusting entry, if any, does the company need to record at the end of the year?
A) Debit Salaries Expense and credit Cash for $16,000.
B) Debit Salaries Expense and credit Salaries Payable for $16,000.
C) Debit Salaries Payable and credit Salaries Expense for $16,000.
D) No adjusting entry is necessary at the end of the year.
Answer: B
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