When recording accrued wages, which accounts are affected?

When recording accrued wages, the correct accounts that are affected are Wage Expense and Wages Payable. Accrued wages refer to the wages that have been earned by employees but have not yet been paid at the end of the accounting period.

In this context, the Wage Expense account is debited to reflect the expense incurred for the work employees have performed during the accounting period. This ensures that the financial records accurately depict the costs associated with employee labor.

On the credit side, Wages Payable is increased, which indicates a liability. This entry reflects the company's obligation to pay the wages that have been accrued but not yet disbursed. Therefore, the entry appropriately recognizes both the expense incurred in the current period and the corresponding liability that the company must settle in the future.

This accounting treatment aligns with the matching principle, ensuring that expenses are recognized in the same period as the revenues they help generate.