A Compensating Differential Is a Difference in Wages Due to Higher

question 118

True/False

A compensating differential is a difference in wages due to higher levels of education or other forms of human capital.

---

Definitions:

Supplies Expense

Costs recorded as an expense when supplies are used up in the normal course of doing business, not when they are purchased.

Owner's Equity

The residual interest in the assets of an entity after deducting liabilities, representing the capital belonging to the owners.

Adjusting Entry

An accounting journal entry made at the end of an accounting period to allocate revenue and expenses to the period in which they actually are applicable.

Prepaid Rent

Payments made in advance for rent that is recorded as an asset on the balance sheet until it is expensed over time as it is used.