The entry to recognize salary expense incurred but not yet paid involves which of the following?
A) an increase in liabilities
B) an increase in assets
C) a decrease in assets
D) an increase in equity

Question

Quizplus · Accepted Answer

Recognition of salary expense incurred but not yet paid results in an increase in the liability of the company as it owes money to its employees for their services. This liability is recognized as salaries payable (short-term liability) and will be settled in the future.

The Entry to Recognize Salary Expense Incurred but Not Yet