To Record Wages Earned but Not Paid Under the Modified

question 12

Multiple Choice

To record wages earned but not paid under the modified cash accounting method,

• A) debit Wages Payable and credit Wages Expense.
• B) debit Cash and credit Wages Expense.
• C) debit Wages Expense and credit Wages Payable.
• D) no entry is required.

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Definitions:

Accounting Objective

The main goal of accounting, which is to provide financial information that is relevant, reliable, and useful for decision-making purposes.

Amortization

The process of gradually writing off the initial cost of an asset over its useful life.

Equity Income

Equity income refers to the earnings generated from investments in the stock of other companies, typically accounted for using the equity method.

Intra-entity Sales

Transactions occurring between the departments or divisions within the same company, often used for internal accounting or transfer pricing.