Where would you put an increase in salaries payable?

Where would you put an increase in salaries payable?

• A. Credit assets
• B. Debits income
• C. Debit liabilities
• D. Credit liabilities

Answer: (D)

When there is an increase in salaries payable, it represents a liability that the organization owes to its employees for work performed but not yet paid for. In accounting terms, liabilities are increased by credits. Thus, to properly reflect this increase in the financial statements, you would credit the salaries payable account, which is classified as a liability. This action acknowledges that the organization now has a higher obligation to pay its employees in the future. The other options do not correctly reflect the accounting principles associated with liabilities. For instance, crediting assets would inaccurately suggest a reduction in the company's resources, and debiting income does not relate to how liabilities are recorded or recognized. Additionally, debiting liabilities would indicate a reduction in obligations, which is not applicable in this scenario of an increase.

When there is an increase in salaries payable, it represents a liability that the organization owes to its employees for work performed but not yet paid for. In accounting terms, liabilities are increased by credits.

Thus, to properly reflect this increase in the financial statements, you would credit the salaries payable account, which is classified as a liability. This action acknowledges that the organization now has a higher obligation to pay its employees in the future.

The other options do not correctly reflect the accounting principles associated with liabilities. For instance, crediting assets would inaccurately suggest a reduction in the company's resources, and debiting income does not relate to how liabilities are recorded or recognized. Additionally, debiting liabilities would indicate a reduction in obligations, which is not applicable in this scenario of an increase.