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the payment of employee salaries has what effect on the accounting equation

Asked Aug 7, 2012, 07:53 PM — 1 Answer
the payment of employee salaries has what effect on the accounting equation?

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pready Posts: 2,662, Reputation: 887
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Aug 8, 2012, 07:38 AM
You have to know what the journal entry is first.

Debit Cash
Credit Salaries Expense

Now you need to know what cash and salaries expense are. Cash is an asset and Salaries Expense is an expense.

Now you need to know how the accounting equation is affected.

Assets Decreased because you paid cash and Retained earnings decreased because expenses decrease net income, which decreases retained earnings.
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