Furst Company pays production workers' salaries on account.The cost will be recognized as an expense when:
A) the goods made by the production workers are sold.
B) the manufacturing process is complete.
C) the cash is paid to settle the associated account payable.
D) none of these answers are correct.

Question

Quizplus · Accepted Answer

The cost of the production workers' salaries will be recognized as an expense once the goods made by the production workers are sold because it is at this point that the revenue earned from selling the goods can be matched with the related expenses incurred in producing them. This is in accordance with the matching principle of accounting.

Furst Company Pays Production Workers' Salaries on Account