An Adjusting Entry Was Made on Year-End December 31 to Accrue

question 221

Multiple Choice

An adjusting entry was made on year-end December 31 to accrue salary expense of $1,200. Which of the following entries would be prepared to record the $3,000 payment of salaries in January of the following year assuming reversing entries were not made?

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Definitions:

Cash Flow Hedge

A financial strategy used to manage the risk of fluctuating cash flows due to changes in exchange rates, interest rates, or commodity prices.

Net Method

An accounting system that records transactions with their net effect, considering any discounts or allowances for prompt payment.

Loan Liability

A financial obligation representing borrowed funds that the borrower is legally required to repay to the creditor, typically with interest.

Foreign Exchange Rate

The rate at which one currency can be exchanged for another, often used in international trade and investment.