During February $5 000 was paid for wages but by 28 February another $500 was still owing. What is the amount of wages expense during February?

Question

BlackTom AI · Accepted Answer

Consider the wages situation described: payments made total $5,000 during February, and by 28 February there remained $500 still owing. 
Option a. $500: This would imply only $500 of wages were expensed in February, which ignores the $5,000 already paid and the $500 still outstanding. It underrepresents the total wages incurred in February.
Option b. $4 500: This would reflect subtracting the outstanding $500 from the payments actually made, as if the unpaid portion is not part of February's expense. However, wages expense should include both cash paid and liabilities incurred during the period, so excluding the $500 owed is incorrect.
Option c. $5 500: This combines the cash paid ($5,000) with the additional wages accrued but not yet paid ($500). In accrual accounting, expenses are recognized when incurred, not when paid, so the $500 owing by 28 February should be included in February's wages expense, totaling $5,500.
Option d. $5 000: This accounts only for cash outlay during February and ignores the $500 owing at the period end. Since the obligation represents wages incurred in February, omitting it would understate February expenses.
In summary, the correct understanding is that wages expense for February includes both the wages paid during the month and the wages incurred but not yet paid by month-end, yielding $5,500. The other options fail to capture either the liability incurred or the correct treatment of expenses under accrual accounting.

During February $5 000 was paid for wages but by 28 February another $500 was still owing. What is the amount of wages expense during February?单项选择题

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