An Adjusting Entry Was Made on the Last Day of the Previous

question 44

Multiple Choice

An adjusting entry was made on the last day of the previous fiscal year debiting Wages Expense and crediting Wages Payable.If a reversing entry has been made,then at the time of payment

• A)the accountant needs to find out how much of the payment applies to the current period and how much applies to the previous period.
• B)the accountant will debit Wages Payable and Wages Expense,and credit Cash.
• C)the accountant will debit Wages Expense and credit Cash.
• D)the accountant will debit Cash and credit Wages Expense.

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Definitions:

Acquisition Method

An accounting technique used in consolidating the financial statements of a group in which one controls one or more others, focusing on fair value of the acquired assets and liabilities.

Stock Contingency

Relates to conditions or events that must occur before the issuance of stock can happen or conditions affecting a stock’s status.

Contingent Performance Obligation

An obligation in a contract that becomes enforceable only under certain conditions or upon the occurrence of specific events.

Additional Paid-In Capital

The amount of capital paid by investors for shares that exceeds the par value of the shares; also referred to as share premium.