The Employees of Dew Drop Inn Get Paid Every Friday

question 65

Multiple Choice

The employees of Dew Drop Inn get paid every Friday for a 5-day workweek (Monday through Friday) .The total payroll is $5,000 per day of work.If the accounting period ends on Friday of a given week,what effect will this have on the company's accounting system?

• A)Decrease Cash by $25,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount.
• B)Increase Salaries payable by $25,000 and increase shareholders' equity by recognizing Salaries expense for the same amount.
• C)Increase Salaries payable by $25,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount.
• D)Decrease Cash by $5,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount.

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Definitions:

ADL

Refers to Activities of Daily Living, which are routine activities people do every day without assistance, such as eating, bathing, dressing, toileting.

Self-sufficiency

The ability of an individual or community to meet their needs without external assistance, including producing food, goods, and services required for living.

Assisted Living

A residential option for seniors who need help with some daily activities like bathing, dressing, and medication management.

ADLs

Activities of Daily Living, which are routine activities people do every day without assistance, such as eating, bathing, dressing, and moving around.