Wyatt Company paid $57,000 in January 2013 for salaries that had been earned by employees in December 2012. Indicate whether each of the following statements about financial statement effects of the January 2013 event is true or false.
_____ a) The income statement for 2013 is not affected because the salaries expense had been recognized at the end of December.
_____ b) On the 2013 statement of cash flows, cash flows from operating activities decreased.
_____ c) Payment of the salaries in 2013 decreased a liability.
_____ d) The 2013 statement of changes in stockholders' equity would not be affected because the salaries expense had been recognized at the end of December.
_____ e) Both assets and equity decreased as a result of this transaction.

Question

Quizplus · Accepted Answer

The Answer of Wyatt Company paid $57,000 in January 2013 for salaries that had been earned by employees in December 2012. Indicate whether each of the following statements about financial statement effects of the January 2013 event is true or false.
_____ a) The income statement for 2013 is not affected because the salaries expense had been recognized at the end of December.
_____ b) On the 2013 statement of cash flows, cash flows from operating activities decreased.
_____ c) Payment of the salaries in 2013 decreased a liability.
_____ d) The 2013 statement of changes in stockholders' equity would not be affected because the salaries expense had been recognized at the end of December.
_____ e) Both assets and equity decreased as a result of this transaction.

Wyatt Company Paid $57,000 in January 2013 for Salaries That