A candy factory's employees work overtime to finish an order that is sold and shipped on February 28. The office sends a statement to the customer in early March and payment is received by mid-March. The overtime wages should be expensed in
A) February.
B) March.
C) the period when the workers receive their checks.
D) either in February or March depending on when the pay period ends.

Question

Quizplus · Accepted Answer

The overtime wages should be expensed in February because the work was performed in that month, aligning with the accrual accounting principle of matching expenses with the period in which they are incurred.

A Candy Factory's Employees Work Overtime to Finish an Order