At the End of an Accounting Period Wages Expense of $190

question 21

Multiple Choice

At the end of an accounting period wages expense of $190 000 is closed to the profit and loss summary account. The wages are made up of $180 000 paid in cash and accrued wages of $10 000. A reversing entry is made for accrued wages on the first day of the next accounting period. The first payment to employees for wages in the new year is $25 000. How would this payment be recorded?

• A) Debit wages expense $15 000; debit accrued wages $10 000; credit bank $25 000
• B) Debit wages expense $25 000; credit bank $25 000
• C) Debit wages expense $15 000; credit bank $15 000
• D) Debit accrued wages $10 000; credit bank $10 000

---

Definitions:

Insurance Annuity

A financial product offered by insurance companies that provides regular payments to the holder for a specified period or for life in exchange for an initial investment.

Rate Of Return

The percentage of gain or loss on an investment over a specified period, representing the profitability as a ratio of original investment.

Heirs

Individuals legally entitled to receive a portion or all of a deceased person’s estate under the laws of inheritance.

Birth Rate

The annual number of births per 1,000 people in a population.