the $20,540 would be included in the entry to record the accrued benefits for the month.
A cost that is recorded on the books but not paid for is referred to as an accrued expense, also known as an accrued liability. In the accounting period in which it occurs, the expense is recorded.
Accrued expenses are listed on a company's balance sheet as current liabilities because they represent a company's obligation to make future cash payments.
When compared to the supplier's invoice, which will arrive at a later time, an accrued expense may be an estimate. According to the accrual method of accounting, costs are recorded as incurred, not necessarily as paid, at the time of the transaction.
Calculation:
Preparation of an Athena Company entry to record the month's accrued benefits
Making use of this formula
Accrued Expenses = Gross Salary *Percentage of Contribution+ The cost of insurance
Accrued Expenses= $158,000 × 0.03 + $15,800
= $4740 + $15,800
= $20,540
Employee Benefits Expense: $20,540
Learn more about accrued expenses with the help of the given link:
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