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

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Definitions:

Timmons Model

A framework for understanding and developing the entrepreneurial process, emphasizing the importance of opportunity recognition, team, and resources.

Driving Forces

Key factors or influences that contribute to the acceleration or direction of change within an organization or market.

Balancing

The process of maintaining equilibrium or stability within operations, finances, or strategies of an organization.

Entrepreneurial Process

The sequence of steps an entrepreneur follows from conceptualizing a business idea to launching and growing a new business.