Question

David hired a new assistant during the last week of August and intends to pay the new assistant in September. The matching principle would require David to do which of the following?

a. Record a liability in September
B. RECORD WAGES EXPENSE IN AUGUST
c. Record a cash payment in August
d. Record wages expense in September

Answer 1

The matching principle would require David to record a liability in September.

Step-by-step explanation:

The matching principle would require David to record a liability in September. According to the matching principle in accounting, expenses should be recorded in the same period as the revenue they help generate.

Since David intends to pay the new assistant in September, it means the work performed by the assistant will generate an expense in September.

Therefore, David should record a liability in September to reflect the amount he owes to the new assistant.