Asked by Caitlin Minton on May 04, 2024
Verified
A metal shop's employees work overtime to finish an order that is sold on March 28. The office sends a statement to the customer in early April and payment is received by mid-April. The overtime wages should be expensed in
A) March.
B) April.
C) the period when the workers receive their checks.
D) either in March or April depending on when the pay period ends.
Overtime Wages
Additional pay granted to employees for hours worked beyond their standard scheduled hours.
Expensed
Recorded as an expense in the financial statements in the period in which it is incurred.
Statement
A formal record or document detailing financial activities or conditions, such as an income statement or balance sheet.
- Gain insight into the necessity of correlating expenses with revenues during the correct financial period.
Verified Answer
TW
Teelyly WangchiaxaMay 06, 2024
Final Answer :
A
Explanation :
Overtime wages should be expensed in the period the work was performed to match the expense with the revenue it helped generate, which is March in this case.
Learning Objectives
- Gain insight into the necessity of correlating expenses with revenues during the correct financial period.