When a fiRm Has Wages Earned but Not Yet Paid

question 25

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.

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Definitions:

Antagonist

A substance that blocks or inhibits the effects of a neurotransmitter or hormone.

Opiate

A group of drugs derived from opium, used for pain relief, but also associated with addiction and dependence.

Excitatory Messages

Neurological signals that increase the likelihood of a neuron firing and thus stimulate action in the nervous system.

Inhibitory Message

A neurological or psychological signal that reduces or prevents certain actions, thoughts, or feelings.