The Payment of Employee Salaries Has What Effect on the Accounting

question 44

Multiple Choice

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

• A)Assets decrease and stockholders' equity decreases.
• B)Liabilities decrease and stockholders' equity decreases.
• C)Assets decrease and liabilities increase.
• D)Assets increase and liabilities decrease.

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Definitions:

Variable Cost

Expenses that fluctuate in direct proportion to the volume of production or commercial operations.

Contribution Margin

The amount by which the sale of a product or service exceeds its production cost, used to cover fixed costs and generate profit.

Depreciation Expense

Distributing the expense of a physical asset across its lifespan.

Fixed Costs

Costs that do not vary with the level of production or sales, including expenses like rent, salaries, and insurance.