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A furniture factory's employees work overtime in February 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 salaries should be expensed in:______
a) the period when the workers receive their cheques
b) either in February or March depending on when the pay period ends
c) February.
d) March.

Respuesta :

Answer: February

Explanation:

Overtime is the amount of time that a person works beyond the normal working hours. From the question, we realise that a furniture factory's workers work overtime in February in order to finish an order that was sold on February 28.

Based on this scenario, the overtime wages should be expensed in February. This is because expenses are recognised when incurred while incomes are recognised when earned. Since the expenses are incurred in February, the overtime salaries should be expensed in February.