Salaries Are $5,000 Per Week for Five Working Days and Are

question 191

Multiple Choice

Salaries are $5,000 per week for five working days and are paid weekly at the end of the day on Fridays. The end of the month falls on a Thursday. The accountant for Sunset, Inc. made the appropriate accrual adjustment and posted it to the ledger. The balance of Salaries Payable, as shown on the adjusted trial balance, will be a ________. (Assume that there was no beginning balance in the Salaries Payable account.)

• A) credit balance of $4,000
• B) debit balance of $1,000
• C) debit balance of $4,000
• D) credit balance of $1,000

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Definitions:

Absorption Costing

An accounting method that assigns all manufacturing costs, including both fixed and variable, to products, fully capturing the cost of production.

Fixed Manufacturing Overhead

Regular, unchanged costs incurred during the manufacturing process, regardless of the level of output.

Variable Costing

A costing method that only includes variable production costs in product costs, excluding fixed manufacturing overhead.

Net Operating Income

The profit generated from a company's day-to-day operations, excluding investment and financing transactions.