The Procedure for a Payroll Accrual Requires Identifying the Portion

question 99

Multiple Choice

The procedure for a payroll accrual requires identifying the portion of the payroll that falls after the payday but within the accounting period, and:

• A)paying employees that amount.
• B)recording the amount as an unusual cost.
• C)providing for both the expense and the liability for the unpaid payroll with an accrual entry when the books a closed.
• D)preparing a supporting note on the financial statement as to the amount of the unpaid payroll.

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Definitions:

Gross Profit Method

A technique used to estimate the amount of ending inventory using the gross profit margin.

Net Realizable Value

The expected selling price in the ordinary course of business minus the estimated costs of completion and the costs necessary to make the sale.

Normal Selling Price

The standard amount charged to customers for a good or service under normal market conditions.

Beginning Inventory

The value of goods available for sale at the start of an accounting period, before any purchases or sales have occurred.