The Employees of Neat Clothes Work Monday Through Friday B) $\begin{array}{|c|r|r|}\hline \text { Salaries expense } & 6,400 \\\hline \text { Salaries payable } & &6,400\\\hline\end{array}$

question 5

Multiple Choice

The employees of Neat Clothes work Monday through Friday. Every other Friday the company issues payroll checks totaling $32,000. The current pay period ends on Friday, July 3. Neat Clothes is now preparing quarterly financial statements for the three months ended June 30. What is the adjusting entry to record accrued salaries at the end of June?

• A) \(\begin{array}{|l|r|r|}
• \hline \text { Salaries expense } & 22,400 & \\
• \hline \text { Prepaid salaries } & 9,600 & \\
• \hline \text { Salaries payable } & & 32,000 \\
• \hline
• \end{array}\)
• B) \(\begin{array}{|c|r|r|}
• \hline \text { Salaries expense } & 6,400 \\
• \hline \text { Salaries payable } & &6,400\\
• \hline
• \end{array}\)
• C) \(\begin{array}{|c|r|r|}
• \hline \text { Prepaid salaries } & 9,600 \\
• \hline \text { Salaries payable } && 9,600 \\
• \hline
• \end{array}\)
• D) \(\begin{array}{|l|r|r|}
• \hline \text { Salaries expense } & 22,400 \\
• \hline \text { Salaries payable } && 22,400 \\
• \hline
• \end{array}\)

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Definitions:

Economic Efficiency

A condition where resources are allocated in a way that maximizes the production of goods and services at the lowest cost to society.

Opportunity Cost

The value of the next best alternative forgone as a result of making a decision.

Comparative Advantage

The ability for a particular individual, commercial entity, or country to produce a certain good or render a service with significantly less opportunity cost compared to opposition.

Domestic Opportunity Costs

The cost of forgoing the next best alternative use of a country's domestic resources.