A company has employees who worked the last week of December, but their salaries will not be paid until January. How should this be recorded in the December financial statements?

• A. Record the salaries as an expense in January when they are paid.
• B. Record a prepaid expense for salaries in December.
• C. Do not record the salaries until they are paid in January.
• D. Record an accrued expense for salaries payable in December.

Answer: (D)