Cash paid for wages and salaries is determined by adding a decrease in wages payable or subtracting an increase in wages payable to the amount of wages and salaries expense.

Question

Quizplus · Accepted Answer

This is because the cash paid for wages and salaries needs to account for any changes in the amount of wages and salaries that have been incurred but not yet paid (wages payable). If wages payable decrease, it means more cash was paid out than the expense recognized, and if wages payable increase, it means less cash was paid out than the expense recognized.

Cash Paid for Wages and Salaries Is Determined by Adding