Jantzen Company recorded employee salaries earned but not yet paid. Which of the following represents the effect of this transaction on the financial statements?

Question

Quizplus · Accepted Answer

Accruing salaries expense increases liabilities (salaries payable) and increases expenses, which decreases net income and equity (retained earnings). It does not affect cash flows.

Jantzen Company Recorded Employee Salaries Earned but Not Yet Paid