The correct cutoff and valuation of accrued salaries and wages
A)is to calculate the exact hours of pay that were earned in the current period and paid in a subsequent period.
B)is to compute an approximate proportion of the wages that were earned in the current period and use that amount as the accrual.
C)allows the client to choose between A and B (above)each year.
D)depends on company policy and whether it is consistently followed.

Question

Quizplus · Accepted Answer

The correct cutoff and valuation of accrued salaries and wages depend on the company policy and whether it is consistently followed. Therefore, the best choice is D. The company should have a set policy on how to calculate and value accrued salaries and wages, and should consistently follow it to ensure accurate financial statements. The policy may be based on factors such as hours worked, pay rates, and the timing of payments. Consistency is important to ensure comparability of financial statements from year to year.

The Correct Cutoff and Valuation of Accrued Salaries and Wages