Question

Erin is opening a dog grooming business. They are setting up their accounting systems and is not sure how to label and classify the receptionist's wages. These wages should be considered a(n) _______and _______

Answer 1

The receptionist's wages would be considered an operating expense and a liability.

Step-by-step explanation:

In the context of accounting, the receptionist's wages would be considered an operating expense and a liability.

Operating Expense:

Operating expenses are the costs incurred by a business to operate on a day-to-day basis. They are subtracted from the revenue to calculate the business's profit. Wages paid to employees, such as the receptionist, are considered operating expenses.

Liability:

A liability is an obligation that a business owes to another party. Wages owed to employees, including the receptionist, are considered liabilities because the business has a legal obligation to pay them.