Question

Sage, Inc. has 20 employees who each earn $100 per day and are paid every Friday. The end of the accounting period is on a Wednesday. How much wages should the firm accrue at the end of the period?A) $2,000. B) $1,000. C) $0 D) $6,000.

Answer 1

Answer:

D) $6,000.

Explanation:

Number of Employees = 20 employees

Earning per day = $100 per day

Total Earning per day = 20 x $100 = $2,000 per day

It is assumed that weekend days are off days and not being paid.

Week days Spent upto last day after payment = Wednesday - Last Monday

Week days Spent upto last day after payment = 3 days

Accrued Expense at the end of accounting period = 3 days x $2,000 per day = $6,000