Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 19 - No. 27)
What is the impact of recording accrued salaries expenses on the balance sheet?
Decrease assets and decrease liabilities.
Increase assets and increase liabilities.
Decrease liabilities and increase equity.
Increase liabilities and decrease equity.
Explanation
Accrued salaries increase liabilities because it's an obligation to the employees. It decreases equity because it decreases the profit.
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