During Clean Dirt,Inc

question 80

Multiple Choice

During Clean Dirt,Inc.'s first year of business,salary expense was $60,000.At the end of its first year of business,Clean Dirt's first balance sheet showed $5,000 of salaries payable.How much did Clean Dirt pay in cash for salaries during its first year of business?

• A)$60,000
• B)$55,000
• C)$65,000
• D)$5,000

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Definitions:

Beginning Inventory

The initial value of goods available for sale at the start of an accounting period.

Purchases

The acquisition of goods or services by a company in exchange for money.

Perpetual Inventory System

An inventory system in which a detailed inventory record is maintained, recording each purchase and sale during the accounting period.

Periodic Inventory System

A periodic inventory system is an accounting method where inventory levels and cost of goods sold are determined at specific periods, such as monthly or annually, through a physical count.