A candy factory's employees work overtime to finish an order that is sold 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 matching principle in accounting which states that expenses should be recorded in the period they are incurred to generate revenues.

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