During 2014,the First Year of Operations,Silver,Inc

question 43

Multiple Choice

During 2014,the first year of operations,Silver,Inc. ,pays salaries of $175,000.At the end of the year,employees have earned salaries of $20,000,which are not paid by Silver until early in 2015.What is the amount of the deduction for salary expense?

• A)If Silver uses the cash method,$175,000 in 2014 and $0 in 2015.
• B)If Silver uses the cash method,$0 in 2014 and $195,000 in 2015.
• C)If Silver uses the accrual method,$175,000 in 2014 and $20,000 in 2015.
• D)If Silver uses the accrual method,$195,000 in 2014 and $0 in 2015.
• E)None of the above is correct.

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Definitions:

Latency Stage

In psychoanalytic theory, a period in childhood development following the phallic stage, characterized by a decrease in sexual interests and conflicts.

Defense Mechanism

Unconscious mechanisms employed to shield oneself from anxiety generated by thoughts or feelings deemed unacceptable.

Denial

An ego defense mechanism in which a person fails to acknowledge unacceptable thoughts, feelings, or actions.

Impulses

Sudden, involuntary urges to act or react that can drive behavior without conscious planning.