The Total Payroll Is $4,000 Per Day of Work

question 150

Multiple Choice

The total payroll is $4,000 per day of work.If the accounting period ends on Friday of a given week,what entry must be made to the company's accounting records?

• A)Decrease Cash by $20,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount.
• B)Increase Salaries payable by $20,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount.
• C)Increase Salaries payable by $20,000 and increase shareholders' equity by recognizing Salaries expense for the same amount.
• D)Decrease Cash by $4,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount.

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Definitions:

Laspeyres Index

A price index used to measure the price change between a base period and the current period, using the base period quantities as weights.

Paasche Index

An economic measure that calculates the change in the price level of goods and services purchased by the consumer in the current period compared to a selected base period, weighting the current period prices.

Laspeyres Price Index

Amount of money at current year prices that an individual requires to purchase a bundle of goods and services chosen in a base year divided by the cost of purchasing the same bundle at base-year prices.

Price Changes

Refers to the variation in the cost of goods and services over time, often influenced by factors such as supply and demand, inflation, and market competition.