Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 18 - No. 22)
What is the effect of recording an accrual of salaries expense at the end of the accounting period?
Assets increase, liabilities increase.
Assets decrease, liabilities increase.
Expenses increase, and liabilities increase.
Expenses decrease and liabilities decrease.
Explanation
The Salaries Expense account increases, which decreases retained earnings. The Salaries Payable account (a liability) increases.
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