In April,Pizza Aroma hired a new employee at a rate of $1,000 per month to start work at the beginning of May.In April,Pizza Aroma should record:
A) nothing, because an exchange of promises is not a transaction.
B) a $1,000 increase to Prepaid wages and a $1,000 decrease to Cash.
C) a $1,000 increase to Wage expense and a $1,000 decrease to Cash.
D) a $1,000 increase in Wages Payable and a $1,000 increase in Wages Expense.

Question

Quizplus · Accepted Answer

In April, no transaction is recorded because the hiring is just an exchange of promises, not an actual financial transaction.

In April,Pizza Aroma Hired a New Employee at a Rate