Karl Company Accrued Wages of $7,350 That Were Earned by Employees

question 166

Multiple Choice

Karl Company accrued wages of $7,350 that were earned by employees unpaid at the year-end.Assuming Karl uses reversing entries,which of the following entries correctly reverses the accrued wages at the beginning of the following year?

• A)Debit Wages Expense $7,350; credit Cash $7,350.
• B)Debit Wages Expense $7,350; credit Wages Payable $7,350.
• C)Debit Wages Payable $7,350; credit Cash $7,350.
• D)Debit Cash $7,350; credit Wages Expense $7,350.
• E)Debit Wages Payable $7,350; credit Wages Expense $7,350.

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Definitions:

Price Signals

Indicators that arise from the fluctuation of prices in a market, guiding economic decisions and resource allocation.

Circular Flow Diagram

An illustration showing the flow of resources from households to firms and of products from firms to households. These flows are accompanied by reverse flows of money from firms to households and from households to firms.

Resource Market

A market where resources (like labor, capital, and land) are bought and sold, allowing businesses to acquire what they need to produce goods and services.

Resource Market

A market where resources (or inputs) for production, such as labor, land, and capital, are bought and sold.