Which account is credited when salary is paid in cash?
Correct answer: B. Cash Account
- A. Salary Account
- B. Cash Account
- C. Capital Account
- D. Drawings Account
Explanation
Salary is an expense and is debited when incurred or paid. Cash decreases because of the payment, so Cash Account is credited.
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About Ledger Accounts and the Trial Balance
Ledger accounts collect transactions under individual headings and use debit and credit sides to determine balances. The trial balance lists those balances to check arithmetical agreement before financial statements are prepared, but it does not reveal every error, such as complete omission, compensating errors or entries made in the wrong account.
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