If Accrued Salaries Were Recorded on December 31 with a Credit

question 106

Multiple Choice

If accrued salaries were recorded on December 31 with a credit to Salaries Payable, the entry to record payment of these wages on the following January 5 would include:

• A) A debit to Cash and a credit to Salaries Payable.
• B) A debit to Cash and a credit to Prepaid Salaries.
• C) A debit to Salaries Payable and a credit to Cash.
• D) A debit to Salaries Payable and a credit to Salaries Expense.
• E) No entry would be necessary on January 5.

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Definitions:

Historical Trends

Analysis of past data to identify patterns or changes over time that may influence future outcomes or behaviors.

Economic Forecasts

Predictions about future economic conditions, including growth rates, inflation, and employment, based on current and historical data.

FA/Sales Ratio

Fixed Assets to Sales Ratio; measures the efficiency of a firm's use of its fixed assets to generate sales.

Financial Forecast

A prediction of future revenues, expenses, and profits of a company, used for budgeting and strategic planning.