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The accounting for salaries paid to employees is complex, involving journal entries for salaries expense and salaries payable. Salaries expense reduces net income, while salaries payable increases liability on the balance sheet. Payroll taxes, union dues, unemployment taxes, and federal income tax withholding must also be considered. When the employer pays employees, salaries payable is debited and cash is credited to reduce the liability. This process is more complex due to additional factors such as payroll taxes and union dues.
