Asked by Isaiah Drayton on Jun 24, 2024
Verified
A furniture factory's employees work overtime in February to finish an order that is sold on February 28.The office sends a statement to the customer in early March and payment is received by mid-March.The overtime salaries should be expensed in
A) February.
B) March.
C) the period when the workers receive their cheques.
D) either February or March depending on when the pay period ends.
Overtime Salaries
Compensation paid to employees for hours worked beyond their normal working hours, usually at a higher rate than the regular hourly wage.
Expenses
Economic costs a business incurs through its operations to earn revenue, representing the outflow of assets or incurring of liabilities.
February
The second month of the year in the Gregorian calendar, often associated with being the shortest month.
- Acquire knowledge on the consequences of altering entries for reporting expenses and revenues.
Verified Answer
SP
Shilvi PatelJun 30, 2024
Final Answer :
A
Explanation :
Overtime salaries should be expensed in the period in which the work was performed, which is February, according to the matching principle of accounting. This principle dictates that expenses should be recognized in the same period as the revenues they helped to generate.
Learning Objectives
- Acquire knowledge on the consequences of altering entries for reporting expenses and revenues.