Recording accrued salary expense at the end of an accounting period causes an increase in Salaries Expense and
A) an increase in a liability.
B) a decrease in an asset.
C) an increase in an equity account.
D) none of these.

Question

Quizplus · Accepted Answer

Accrued salary expense represents salaries owed to employees but not yet paid. Recording this expense at the end of an accounting period increases the Salaries Expense account, which is an income statement account. It also increases a liability account, typically called Accrued Salaries Payable, since the company now owes money to its employees for work performed but not yet paid for. Therefore, choice A is the correct answer. There is no decrease in an asset or increase in an equity account when recording accrued salary expense.

Recording Accrued Salary Expense at the End of an Accounting