Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 43 - No. 1)
What is the effect on the accounting equation when a company declares and pays salaries expense?
Assets increase, liabilities increase.
Assets decrease, liabilities decrease.
Assets decrease, equity decreases.
Assets increase, equity increases.
Explanation
Cash (an asset) decreases, and salary expense (reducing equity) increases.
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