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.

Question

Quizplus · Accepted Answer

The overtime salaries should be expensed in February because the work was performed in that month, aligning with the accrual accounting principle of matching expenses with the revenues they help generate.

A Furniture Factory's Employees Work Overtime in February to Finish