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Donald’s Drive-in Hamburger restaurant pays its employees on Friday for every week (regular work week - Monday through Friday.) The total payroll for the last week of the calendar year is $5,000, and the year ends on Wednesday.
1. What accounts should payroll use for recording the expense for the year that is ending, and how much is recognized?
2. What accounting principle does this address?
3. What effect will NOT recording the expense of the period have on the Income Statement? On the Balance Sheet?
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