Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 4 - No. 14)
When a business owes salaries to its employees but hasn't paid them yet, what is the correct accounting treatment?
Debit salaries expense and credit cash.
Debit salaries expense and credit salaries payable.
Debit cash and credit salaries expense.
Debit salaries payable and credit salaries expense.
Explanation
This creates an accrued expense - a liability.
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