Financial Reporting and Analysis Q158

0. At the beginning of the year, Donald owed his employees 16,000. The total salary expense incurred during the year amounted to 40,000. The cash flow statement showed a salary expense of $49,000. What liability did Donald record at the end of the year?

Answer
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Option : A
Explanation : Salary payable = Beginning salary payable + Salary expense - Cash paid Salary payable = 16,000 + 40,000 - 49,000 = 7,000.

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