As the controller of newton consulting, you have hired a new employee, whom you must train. she objects to making an adjusting

Question

3 years ago

5

As the controller of newton consulting, you have hired a new employee, whom you must train. she objects to making an adjusting

entry for accrued salaries at the end of the period. she reasons, "we will pay the salaries soon. why not wait until payment to record the expense

Business

1 answer:

katrin [286] · Answer 1 · 2022-07-30T20:00:26+03:00

Answer:

The new employee is WRONG because of the accounting principle of the matching concept

Explanation:

At the end of the month before closing the books, all expenses and revenue relating to that month must be captured. This helps the organisation to know how much costs it has incurred for that period. If the expense is delayed until payment before recording, it will not give a true picture of the monthly expenses.

The matching concept explains and underscores the accounting practice of recognizing revenues and related expenses within the same accounting period. The purpose of doing so is to avoid 'mismatching' which will lead to misstating the earnings for a period.

Moreover that practice will be against Accrual Basis of Accounting

As the controller of newton​ consulting, you have hired a new​ employee, whom you must train. she objects to making an adjusting

As the controller of newton consulting, you have hired a new employee, whom you must train. she objects to making an adjusting