Daniel Pattap, factory worker at Schott Enterprises, has been attending night classes to earn a degree in business. He was particularly puzzled by what one of his accounting professors had said in class the previous evening. The professor, who knew that Daniel worked on the assembly-line at a factory, had said that some of Daniels salary could end up as an asset on the balance sheet instead of as an expense on the income statement at the end of the month. This didnt make any sense to Joe since he gets the salary, not the company.

REQUIRED: Explain to Daniel why some of his salary could end up as an asset on the companys balance sheet at the end of the month. Include and explain any relevant accounting principles that may apply.