During 2019 Annette's Mechanical Paid Out $85 000 in Wages

question 2

Multiple Choice

During 2019 Annette's Mechanical paid out $85 000 in wages from its bank account. This $85 000 included $5 400 that was owing but unpaid at year-end for 2018. At year-end 2019 wages owing but unpaid were $12 300. The business uses accrual accounting. How much would be reported as wages expense for 2019?

• A) $85 000
• B) $91 900
• C) $97 300
• D) $12 300

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Definitions:

Work In Process

Items that are in the production process but are not yet complete; a component of inventory costs.

Economic Order Quantity

A calculation used to determine the most cost-effective quantity of stock to order, balancing ordering costs with stock holding costs.

Acquisition Cost

The total expense incurred to acquire an asset, including the purchase price and all related costs.

Inventory Stock

Goods or materials that a business holds for the ultimate goal of resale.