What type of adjustment is used for an associate that didn't get paid?

The choice of a prior period adjustment is appropriate in the context of addressing a situation where an associate did not receive their expected payment. A prior period adjustment is used to correct errors or omissions that pertain to previous financial periods. This type of adjustment ensures that the financial statements accurately reflect all liabilities, including any payroll that was not processed in the previous accounting period.

When an associate is unpaid, it indicates that there was an oversight or error in processing their compensation for that earlier period. Therefore, by utilizing a prior period adjustment, the necessary changes can be made to the accounting records, ensuring that salary expenses are recognized in the correct period, thus maintaining the accuracy of financial reporting. This rectification is essential for compliance with accounting principles which emphasize that expenses should be recorded in the period they are incurred, irrespective of when the payment is actually made.