Flagg Records Adjusting Entries at Its December 31 Year End

question 30

Multiple Choice

Flagg records adjusting entries at its December 31 year end. At December 31, employees had earned $12,000 of unpaid and unrecorded salaries. The next payday is January 3, at which time $30,000 will be paid. Prepare the January 1 journal entry to reverse the effect of the December 31 salary expense accrual.

• A) Debit Salaries payable $12,000, credit Salaries expense $12,000.
• B) Debit Salaries expense $18,000; debit Salaries payable $12,000; credit Cash $30,000.
• C) Debit Salaries expense $12,000; credit Salaries payable $12,000.
• D) Debit Salaries payable $18,000; credit Cash $18,000.
• E) Debit Salaries expense $18,000; credit Salaries payable $18,000.

Understand the difference and importance of the contribution margin in cost-volume-profit analysis.

Differentiate between traditional and contribution format income statements.

Recognize the significance of opportunity costs and sunk costs in decision-making.

Understand the classification of costs within a manufacturing environment, including direct and indirect materials, labor, and overhead.

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Definitions:

Immigration

The action of coming to live permanently in a foreign country, often resulting from the desire for better opportunities or to escape adverse conditions.

U.S. Census

A decennial (every 10 years) count and demographic survey of the United States population, used to allocate congressional seats, electoral votes, and government funding.

Undercounted

Describes a situation where the actual number or extent of a phenomenon is not fully captured or represented in official counts or statistics.

Urban Dwellers

Individuals who live in cities, characteristically dealing with a different lifestyle and challenges than those in rural areas.