Wing Company paid $20,000 cash in salaries to its employees. Which of the following shows the impact of this transaction on Wing's accounting equation? $\begin{array}{ccccc}
\text { Assets} &=& \text { Liabilities} & + \text { stockholcers }{ }^{\prime} \text { equity } \
\end{array}$
A.
$\begin{array}{llcc}
&+/-&&&& \text {n/a }&&&&&& \text {n/a } \
\end{array}$

B.
$\begin{array}{llcc}
&+&&&&& \text {n/a } &&&&&&&+ \
\end{array}$

C.
$\begin{array}{llcc}
&-& &&&& \text { n/a } &&&&&&&-\
\end{array}$

D.
$\begin{array}{llcc}
&+&&&&&&+&&&&&&& \text {n/a } \
\end{array}$

Question

Wing Company paid $20,000 cash in salaries to its employees. Which of the following shows the impact of this transaction on Wing's accounting equation? $\begin{array}{ccccc}
  \text {  Assets} &=& \text { Liabilities} & + \text { stockholcers }{ }^{\prime} \text { equity }  \
\end{array}$ 
A.
$\begin{array}{llcc}
&+/-&&&&  \text {n/a  }&&&&&&  \text {n/a  }  \
\end{array}$

B.
$\begin{array}{llcc}
&+&&&&&  \text {n/a  } &&&&&&&+ \
\end{array}$
 
C.
$\begin{array}{llcc}
 &-& &&&&  \text { n/a } &&&&&&&-\
\end{array}$

D.
$\begin{array}{llcc}
&+&&&&&&+&&&&&&&  \text {n/a  } \
\end{array}$

Quizplus · Accepted Answer

The payment of salaries decreases assets (cash) and decreases stockholders' equity (retained earnings) due to the expense incurred.

Wing Company Paid $20,000 Cash in Salaries to Its Employees Assets= Liabilities+ stockholcers ′ equity \begin{array}{ccccc} \text { Assets} &=& \text { Liabilities} & + \text { stockholcers }{ }^{\prime} \text { equity } \\\end{array} Assets​=​ Liabilities​+ stockholcers ′ equity ​

Wing Company Paid $20,000 Cash in Salaries to Its Employees $\begin{array}{ccccc} \text { Assets} &=& \text { Liabilities} & + \text { stockholcers }{ }^{\prime} \text { equity } \\\end{array}$