Question

Mr Arun paid the salary of his helper in shop amounting to Rs 25,000 per month for 2 months i.e. March & April 2018 in the month of March only. Which of the following is the correct adjustment entry for the same?

• A.

  Prepaid Salary A/c Dr	50,000
  To Salary A/c	50,000

• B.

  Salary A/c Dr	25,000
  To prepaid salary A/c	25,000

• C.

  Prepaid Salary A/c Dr	25,000
  To Salary A/c	25,000

• D.

  Outstanding salary A/c Dr	50,000
  To Salary A/c	50,000

Answer 1

The correct option is C

Prepaid Salary A/c Dr	25,000
To Salary A/c	25,000

The correct adjusting entry is

Prepaid Salary A/c Dr	25,000
To Salary A/c	25,000