A Company Reported Salaries and Wages Payable of $750 at the Beginning

question 195

Multiple Choice

A company reported Salaries and Wages Payable of $750 at the beginning of the year and $2,500 at the end of the year.The income statement for the year reported Salaries and Wages Expense of $56,200.How much cash was paid for salaries and wages during the year?

• A) $52,950
• B) $56,200
• C) $54,450
• D) $53,700

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Definitions:

Monetary Neutrality

The concept that changes in the money supply only affect nominal variables, like prices, not real variables like output or employment in the long term.

Classical Dichotomy

The theoretical separation of nominal and real variables

Short-Run Phillips

A theoretical framework that implies a short-term inverse correlation between inflation rates and unemployment levels.

Classical Dichotomy

The theoretical separation of nominal and real variables in an economy, suggesting that changes in the money supply only affect nominal variables and not real variables like output.