When a fiRm Has Wages Earned but Not Yet Paid

Multiple Choice

When a firm has wages earned but not yet paid at the end of a financial reporting period, what must it do to recognize the liabilities and expenses?

A) It must credit the asset accounts for the appropriate payroll amounts.
B) It must create an adjusting entry to recognize the payroll accrual.
C) It must pay its employees for the wages earned as of that date.
D) It must wait until the next financial period to record the payroll data.