Power Electric Has Two Part-Time Employees; Each Employee Earns $200

question 14

Multiple Choice

Power Electric has two part-time employees; each employee earns $200 per day.They are normally paid on Fridays for work completed Monday through Friday of the same week.April 25,2014,was a Friday,and they were paid in full on that day.The employees worked on Monday,Tuesday,and Wednesday,April 28 through 30,2014,and the related adjusting entry was recorded on April 30,2014.The company paid the two employees for a full week of work on Friday,May 2,2014.How would the company record this transaction?

• A)Debit Salaries Expense for $1,000 and credit Cash for $1,000.
• B)Debit Salaries Expense for $400 and credit Cash for $400.
• C)Debit Salaries Expense for $400 and credit Salaries Payable for $400.
• D)Debit Salaries Expense for $600 and credit Salaries Payable for $600.
• E)Debit Salaries Expense for $400,credit Salaries Payable for $600,and credit Cash for $1,000.

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Definitions:

Inventories Losses

Reductions in the amount or value of inventories due to factors such as deterioration, obsolescence, or theft, resulting in financial loss.

Lower Of Cost

An accounting principle requiring that the inventory is recorded at the lower of its cost or the current market value.

Net Realisable Value

The estimated selling price of goods, minus the costs of their completion and the costs needed to make the sale.

Biological Assets

Living plants or animals that are used in agricultural production or held for sale, whose value and productivity can change over time due to biological transformation.