Cash paid for salaries will be less than the salary expense for the same period if the salary payable balance increases.

Question

Quizplus · Accepted Answer

When the salary payable balance increases, it means that not all of the salary expense incurred during the period has been paid in cash; some of it has been recorded as a liability to be paid in the future, resulting in cash paid being less than the salary expense.

Cash Paid for Salaries Will Be Less Than the Salary