Sunset Inc has a policy of accruing 1900 for every employee

Sunset, Inc. has a policy of accruing $1,900 for every employee as a vacation benefit. Sarah, an employee, took a vacation. Which of the following is the correct journal entry for the vacation benefit paid? O A. Vacation Benefits Payable OB. Vacation Benefits Expense 1,900 Cash 1,900 1,900 Cash 1,900 C. Vacation Benefits Expense 1,583 Vacation Benefits Payable 1,583 O D. Vacation Benefits Payable 1,583 Vacation Benefits Expense 1,583

Solution

Answer is A. Vacation benefits payable Dr. 1900               Cash account 1900 Explanation: Vacation benefits has been taken as expense earlier by passing the entry: Vacation benefit expense Dr.      Vcation benefits payable Later when it is paid to employee the vacation benefit paybale get debited by crediting cash.