Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 42 - No. 7)
What is the impact on the balance sheet of making the adjusting entry for accrued salaries?
Decrease assets and decrease liabilities.
Increase assets and increase liabilities.
No change to assets and liabilities.
Increase liabilities and decrease equity.
Explanation
The adjusting entry for accrued salaries increases liabilities (salaries payable) and decreases equity (retained earnings).
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