Question

Salaries and wages payments may be paid in the accounting period after the work is performed. The accrual of these amounts will increase ___________ and

Answer 1

Answer:

they will increase the expenses (in the income statement) and short term liabilities.

Explanation:

There are two methods that can be used to make payments. On cash basis, you can directly pay the amount, then the assets decrease (cash) and the expenses increases (wages).

If you somehow accrue the amount and pay it on a future date, then it will be regarded as short term liabilities that has to be covered up within 12 months.