During Clean Dirt,Inc.'s first year of business,salary expense was $60,000.At the end of its first year of business,Clean Dirt's first balance sheet showed $5,000 of salaries payable.How much did Clean Dirt pay in cash for salaries during its first year of business?
A)$60,000
B)$55,000
C)$65,000
D)$5,000

Question

Quizplus · Accepted Answer

Clean Dirt, Inc. paid $60,000 in salary expense during its first year of business. However, there was $5,000 of salaries payable on the balance sheet at the end of the year, indicating that some of the salary expense had not yet been paid in cash. Therefore, the amount of cash paid for salaries during the first year would be $60,000 - $5,000 = $55,000.