The Employees of Leicester Services Company Worked the Last Two

question 3

Multiple Choice

The employees of Leicester Services Company worked the last two weeks of December,2016.They received their paychecks on January 2,2017.Which of the following accounts should appear on the income statement for the year ended December 31,2016?

• A)Salaries Expense
• B)Prepaid Expense
• C)Salaries Payable
• D)Unearned Revenue

---

Definitions:

Direct Labor-Hours

The total hours of work directly involved in manufacturing goods or delivering services, often used as a basis for allocating overhead.

Casting

A process in manufacturing where a liquid material is poured into a mold which contains a hollow cavity of the desired shape and then allowed to solidify.

Assembly

The process of putting together various components or materials to create a finished product.

Predetermined Overhead Rates

An estimated rate used to allocate manufacturing overhead costs to individual products or job orders based on a chosen activity base.