Finke Company's employees are paid each Friday for hours worked the previous week. At the end of the accounting period, Finke Company accrues $3,200 for earned salaries that have not yet been paid. Which of the following best describes this accrual transaction type?

a. Asset source transaction

b. Asset use transaction

c. Asset exchange transaction

d. Claims exchange transaction

Question

Business

Brett

24 February, 15:26

Finke Company's employees are paid each Friday for hours worked the previous week. At the end of the accounting period, Finke Company accrues $3,200 for earned salaries that have not yet been paid. Which of the following best describes this accrual transaction type?

a. Asset source transaction

b. Asset use transaction

c. Asset exchange transaction

d. Claims exchange transaction

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Answers (1)

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Daniela Spears · Answer 1

d. Claims exchange transaction

Explanation:

Claims exchange transaction -

It refers to any discrepancy in the claims, is referred to as claims exchange transaction.

In this case the claim of one reduces and others increases and hence the total claim remains constant.

Hence, from the given scenario of the question,

The correct option is d. Claims exchange transaction.