Which of the following answer choices accurately reflects how the recording of accrued salary expense at the end of the year affects the financial statements of a business?
A. $\quad\quad\quad\quad\quad+\quad\quad\quad\quad-\quad\quad\quad\quad\quad\quad+\quad\quad\quad\quad\quad-\quad\quad\quad\text{-QA}$
B.$\quad\quad -\quad\quad\quad\quad\quad\quad\quad-\quad\quad\quad\quad\quad\quad+\quad\quad\quad\quad\quad\quad-$
C.$\quad\quad\quad\quad\quad+\quad\quad\quad\quad-\quad\quad\quad\quad\quad\quad+\quad\quad\quad\quad\quad\quad-\quad$
D. $\quad\quad-\quad\quad\quad\quad\quad\quad\quad-\quad\quad\quad+\quad\quad\quad\quad\quad\quad\quad\quad\quad+\quad\quad\quad\text{-QA}$
A) Option A
B) Option B
C) Option C
D) Option D

Question

Which of the following answer choices accurately reflects how the recording of accrued salary expense at the end of the year affects the financial statements of a business? 
A. $\quad\quad\quad\quad\quad+\quad\quad\quad\quad-\quad\quad\quad\quad\quad\quad+\quad\quad\quad\quad\quad-\quad\quad\quad\text{-QA}$
B.$\quad\quad -\quad\quad\quad\quad\quad\quad\quad-\quad\quad\quad\quad\quad\quad+\quad\quad\quad\quad\quad\quad-$
C.$\quad\quad\quad\quad\quad+\quad\quad\quad\quad-\quad\quad\quad\quad\quad\quad+\quad\quad\quad\quad\quad\quad-\quad$
D. $\quad\quad-\quad\quad\quad\quad\quad\quad\quad-\quad\quad\quad+\quad\quad\quad\quad\quad\quad\quad\quad\quad+\quad\quad\quad\text{-QA}$
A) Option A 
B) Option B 
C) Option C 
D) Option D

Quizplus · Accepted Answer

Accrued salary expense at the end of the year represents the salary earned by employees but not yet paid. This means that the expense needs to be recorded as an accrued liability on the balance sheet, and when the payment is finally made in the upcoming year, it will then be reflected in the income statement as a salary expense. This means that the impact on the financial statements is as follows:

- Balance Sheet: increase in accrued salary liability
- Income Statement: no effect in the current year, but will result in an increase in salary expense in the following year when the payment is made.

Option A is incorrect because it implies that the expense is recorded as an asset, which is not correct. 
Option B is incorrect because it implies that the expense is recorded as revenue, which is not correct. 
Option D is incorrect because it implies that the expense reduces net income, which is not the case until the payment is made in the following year.

Which of the Following Answer Choices Accurately Reflects How the Recording