The employees of Dew Drop Inn get paid every Friday for a 5-day workweek (Monday through Friday).The total payroll is $5,000 per day of work.If the accounting period ends on Wednesday of a given week and the proper adjustment is made on Wednesday,what will be the effect of the adjustment on the company's financial statements?
A)The balance sheet will report additional salaries expense of $15,000.
B)The balance sheet will report additional salaries expense of $25,000.
C)The income statement will report additional salaries expense of $15,000.
D)The income statement will report additional salaries expense of $25,000.

Question

Quizplus · Accepted Answer

Since the accounting period ends on Wednesday, the adjustment will account for the salaries expense incurred from Monday to Wednesday, totaling $15,000 ($5,000 per day for 3 days). This adjustment increases the salaries expense reported on the income statement by $15,000.

The Employees of Dew Drop Inn Get Paid Every Friday