Classic Artists' Services Has Hired a Maintenance Man to Maintain

question 71

Multiple Choice

Classic Artists' Services has hired a maintenance man to maintain a building they use for instruction.He will begin work on February 1 and work through till May 31.They will pay the maintenance man $2,000 at the end of May.Classic Artists' Services accrue Maintenance expense at the end of every month.What is the balance in the Accounts payable account for amounts owed to the maintenance man at the end of March?

• A) Debit balance of $2,000
• B) Credit balance of $1,000
• C) Debit balance of $1,000
• D) Credit balance of $2,000

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Definitions:

Accrued Expense

An accounting term referring to expenses that have been incurred but not yet paid, representing liabilities on a company's balance sheet.

Income Taxes

Taxes levied by the government on income generated by businesses and individuals within their jurisdiction.

Accounting Period

A specific period of time used for financial reporting, typically a year or quarter, during which a company's financial performance is calculated.

Adjusting Entries

Accounting records created at the conclusion of an accounting cycle to distribute revenues and expenses to the period they truly belong.