Incurring employees' salaries but not paying them causes no change to stockholders' equity.

Question

Quizplus · Accepted Answer

Incurring employees' salaries but not paying them would result in an increase in the accrued salary liability, which is a form of accounts payable. This liability would reduce stockholders' equity through the reduction of retained earnings, which is a component of stockholders' equity. Therefore, the statement given is incorrect.

Incurring Employees' Salaries but Not Paying Them Causes No Change