The Freddie Corp

question 72

Multiple Choice

The Freddie Corp. pays its workers every Friday. This year, December 31 was a Wednesday. As of the end of the year, the employees had worked Monday, Tuesday, and Wednesday, and they had earned $3,000 for those three days. What adjustment, if any, is needed in this situation as of December 31?

• A) A $3,000 increase to net assets and to owners' equity (salary expense is reduced by $3,000)
• B) A $3,000 decrease in cash, and a $3,000 decrease to owners' equity (salary expense is increased by $3,000)
• C) A $3,000 increase in salaries payable, and a $3,000 decrease in owners' equity (salary expense is increased by $3,000)
• D) No adjustment is needed

---

Definitions:

PWM Signal

A PWM (Pulse Width Modulation) signal is a method used in electrical control systems to regulate the amount of power delivered to a device by modifying the width of the pulse of the signal.

Allison TC10

A model of a fully automatic transmission designed by Allison Transmission, often used in heavy-duty commercial vehicles for optimized performance.

Countershafts

Secondary shafts in a gearbox that rotate to transfer motion from the main shaft to various gears, altering the output speed and torque.

Torque Split

The distribution of engine torque between the front and rear axles in an all-wheel drive or four-wheel drive system.