During 2016, the First Year of Operations, Silver, Inc

Multiple Choice

During 2016, the first year of operations, Silver, Inc., pays salaries of $175,000. At the end of the year, employees have earned salaries of $20,000, which are not paid by Silver until early in 2017. What is the amount of the deduction for salary expense?

A) If Silver uses the cash method, $175,000 in 2016 and $0 in 2017.
B) If Silver uses the cash method, $0 in 2016 and $195,000 in 2017.
C) If Silver uses the accrual method, $175,000 in 2016 and $20,000 in 2017.
D) If Silver uses the accrual method, $195,000 in 2016 and $0 in 2017.
E) None of the above is correct.