A Business Paid $1255 for Employees' Wages at the End

question 51

Multiple Choice

A business paid $1255 for employees' wages at the end of the week.The debit and credit entries are:

• A) debit cash $1255; credit equity $1255.
• B) debit wages expense $1255; credit cash $1255.
• C) debit wages expense $1255; credit wages payable $1255.
• D) debit equity $1255; credit wages expense $1255.

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Definitions:

Ending Inventory

Merchandise value ready to be sold at the close of an accounting cycle.

Retained Earnings

The portion of net earnings not distributed as dividends, but retained by the company to be reinvested in its core business or to pay debt.

Accounting Principle

Guidelines and rules that govern the accounting practices and procedures.

Financial Statement Presentation

The manner in which a company's financial data is organized and displayed in its financial statements.