The Total Payroll Is $3,000 Per Day of Work

question 174

Multiple Choice

The total payroll is $3,000 per day of work.If the accounting period ends on Thursday of a given week,what adjustment must be made to the company's accounting records?

• A)Increase Salaries payable by $15,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount.
• B)Increase Salaries payable by $12,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount.
• C)Decrease Cash by $12,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount.
• D)No adjustment is necessary because there is no expense until the employees are paid on Friday.

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Definitions:

Sales Mix

Sales mix refers to the proportion of different products or services sold by a company, influencing decisions on pricing, marketing, and production.

Variable Expenses

Costs that vary in direct proportion to changes in an organization's activity level or volume of output.

Fixed Expenses

Costs that remain constant for a given period of time, regardless of changes in production level, sales volume, or other business activities.

Total Sales

The sum of all revenue generated from the sale of goods or services in a specific period before any deductions.