Asked by Ismael Colon on Jun 23, 2024
Verified
Cup's Inc. paid $15,000 in salaries and wages for February. This transaction will:
A) increase Expenses and decrease Revenue.
B) increase Expenses and increase Liabilities.
C) decrease Assets and increase Expenses.
D) increase Assets and Expenses.
Salaries and Wages
Compensation paid to employees for their services, including both regular salary and hourly wages.
Expenses
The outflows or consumption of assets or incurring/liabilities (creating a liability) from a company's operations aimed at generating revenue.
Revenue
The total income generated from normal business operations, including sales of goods and services before any expenses are subtracted.
- Appreciate the significance of revenue and expenditures in shaping the financial stability of a company.
- Assess the impact of different financial transactions on Assets, Liabilities, and Owner's Equity.
Verified Answer
OT
Olivia Thaggard
Jun 29, 2024
Final Answer :
C
Explanation :
Paying salaries and wages increases expenses because it is a cost incurred by the business. It decreases assets because cash (an asset) is used to pay these expenses.
Learning Objectives
- Appreciate the significance of revenue and expenditures in shaping the financial stability of a company.
- Assess the impact of different financial transactions on Assets, Liabilities, and Owner's Equity.