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

Name: Incurring employees' salaries but not paying them causes no change to stockholders' equity.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Incurring employees' salaries but not paying them would increase the company's liability, which would decrease stockholders' equity through the accounting equation (assets = liabilities + stockholders' equity). Therefore, it would cause a change in stockholders' equity.

Incurring Employees' Salaries but Not Paying Them Causes No Change