ABC Company Inc., which operates on accrual basis accounting, hired an employee who started work on May 15, 2022. Per the companys policies, the employee became eligible to start earning paid time off (PTO) after 6 months at a rate of 10 hours per month and PTO is paid out upon termination.

When the employer pays the employee in 2023 for the PTO earned in 2022, what account will the company debit?

Wage Expense

Accrued PTO

Prepaid Expense

Cash