The University Satellite Office Operates Five Days Per Week with a Daily

question 41

Multiple Choice

The university satellite office operates five days per week with a daily payroll of $5,000. Employees are paid every Saturday for the workweek just completed (Monday through Friday) . The last day of the month is Wednesday, October 31. What is the effect of the correct adjustment at October 31?

• A)Increases Stockholders' equity and Wages Payable by $15,000.
• B)Increases Wages Payable and decreases Cash by $10,000.
• C)Decreases Stockholders' equity and increases Wages Payable by 15,000.
• D)Increases Wages Payable and increases Wages Expense by $25,000.

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Definitions:

Maturity Value

The amount to be paid to the holder of a financial instrument at its maturity date.

Note Receivable

A written promise that one party will receive a specified sum of money from another party at a future date.

Interest Rate

The percentage of a sum of money charged for its use, often expressed as an annual percentage.

Note Duration

The length of time until a note payable or receivable is due to be paid or received.