Wages expense in the income statement is $56,250 with the statement of financial position at the end of the year showing accrued wages of $2,000.If there were no accrued wages at the beginning of the period,how much was paid out in cash for wages during the year?

Question

Quizplus · Accepted Answer

The total amount of wages paid during the year is calculated by adding the wages expense and the accrued wages at the end of the period and subtracting the accrued wages at the beginning of the period. Since there were no accrued wages at the beginning of the period, the calculation is: Wages paid during the year = Wages expense + Accrued wages at the end of the period = $56,250 + $2,000 = $58,250. However, the question specifically asks how much was paid out in cash for wages during the year, which excludes the accrued wages at the end of the period. Therefore, the answer is $58,250 - $2,000 = $54,250. The correct choice is A.

Wages Expense in the Income Statement Is $56,250 with the Statement