On March 1 2022 Freeze Company hires a new employee who will start to work on March 6.The employee will be paid on the last day of each month.Has an accounting transaction occurred on March 1? Why or why not?

Question

Quizplus · Accepted Answer

While the hiring of a new employee is an important event for the company, it does not represent an accounting transaction. An accounting transaction requires an exchange of assets, liabilities, or equity between two parties. In this case, there has not yet been any exchange of assets or funds between the company and the new employee, as the employee has not yet started working.

On March 1 2022 Freeze Company Hires a New Employee