Small Corporation Uses a Wages Clearing Account for Its Payroll

question 23

Multiple Choice

Small Corporation uses a Wages Clearing Account for its payroll disbursements. At the end of February, a reasonably large debit balance remained in this account. The most likely reason for this is that

• A)more labor cost had been assigned to the expense accounts than had been paid.
• B)some labor cost had not been properly classified in the expense accounts.
• C)some employees had not yet cashed their checks.
• D)not enough cash had been transferred to the bank account.

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