The company paid cash to Lyn Addie for five days' work at the rate of \( \$ 195 \) per day. Four of the five days relate to wages payable that were accrued in the prior year.

Did you know that cash payments for wages not only impact the company's cash flow but also play a vital role in accounting principles? Companies are required to recognize wages incurred and accrued in the correct accounting period. This ensures that the financial records accurately reflect expenses and liabilities, supporting the fundamental concept of the matching principle! Now, let’s consider how this affects the accounting records. When paying Lyn Addie, the company will debit the wages expense for \( \$ 195 \) for the day of work while also adjusting the wages payable for the four previously accrued days. It’s crucial to keep track of these entries to ensure the liability is reduced accurately and the expense is reflected properly in the financial statements!