Assume That an Employee Works and Earns $100, but Has

question 35

Multiple Choice

Assume that an employee works and earns $100, but has not yet been paid when the accounting period ends. Under accrual accounting, the books should reflect

• A) Nothing, since the employee has not yet been paid
• B) A liability of $100 and a revenue of $100
• C) An asset of $100 and an expense of $100
• D) A liability of $100 and an expense of $100

---

Definitions:

Total Utility

The overall satisfaction or happiness a consumer derives from consuming a certain quantity of goods and services.

Marginal Utility

The extra benefit or utility gained from acquiring or consuming an additional unit of a product or service.

Utility Per Dollar

The amount of satisfaction or usefulness gained per unit of currency spent, used to measure consumer value.

Marginal Utility

Marginal utility is the change in total satisfaction or utility that a consumer experiences from consuming an additional unit of a good or service.