The payment of salaries to employees for wages of the current period would:
A)increase owner's equity and decrease liabilities.
B)increase net income and decrease assets.
C)decrease assets and owner's equity.
D)increase assets and decrease owner's equity.

Question

Quizplus · Accepted Answer

Paying salaries decreases assets (cash) and decreases owner's equity because it is an expense, which reduces net income and, consequently, owner's equity.

The Payment of Salaries to Employees for Wages of the Current