If a Firm Accrues the Payroll Due but Not Paid

question 44

Multiple Choice

If a firm accrues the payroll due but not paid at the end of a financial period,what should it do on the first day of the next financial period?

• A)It should create a reversing entry in the General Journal.
• B)It should disburse the accrued pay to the employees.
• C)It should create a reminder about the accrual to ensure accuracy of computations on the next pay date.
• D)It should make a note to create the reversing entry at the end of the next financial period.

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Definitions:

Initial Registration

The process through which a business formally records its initial information with the relevant authorities, often related to its establishment or incorporation.

Securities

Financial instruments that hold some type of monetary value, such as stocks, bonds, or options, which can be traded on financial markets.

Compliance

Adherence to laws, regulations, guidelines, and specifications relevant to business operations.

Registration Filing

The process of submitting required documents to a regulatory body to declare the details of securities to be offered to the public.