A credit balance for wages payable on a balance sheet indicates:

In accrual accounting, the " wages payable " account is a liability account used to track compensation that employees have earned but for which they have not yet received payment. Because it is a liability account, its normal balance is a credit . A credit balance in this account on the balance sheet at the end of an accounting period signifies that there are outstanding payroll payments due to employees for work performed during the current or previous periods. This occurs when an accounting period ends between two pay dates, necessitating an accrual entry to match expenses to the period they were incurred. When the payroll is finally processed and funds are disbursed, the wages payable account is debited, and the cash account is credited, thereby reducing the liability .