Assume That No Reversing Entries Are Made by This Firm

question 35

Multiple Choice

Assume that no reversing entries are made by this firm. If wages of $12 400 were accrued by it at the end of the year and the first payment of wages in the subsequent year was $110 500 how would this payment be recorded?

• A) Debit salaries payable $12 400; debit salaries expense $98 100; credit cash $110 500
• B) Credit salaries payable $12 400; debit salaries expense $122 900; credit cash $110 500
• C) Debit salaries payable $12 400; debit salaries expense $110 500; credit cash $122 900
• D) Debit salaries expense $98 100; credit cash$98 100

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Definitions:

Net Present Value

A valuation method that reflects the present value of an investment's future net cash flows minus the initial investment cost.