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The accounting for salaries paid to employees involves debiting salaries expense and crediting salaries payable for the owed amount. Salaries expense reduces net income on the income statement, while salaries payable increases current liabilities on the balance sheet. When the employer pays the employees, salaries payable are debited and cash is credited. Payroll taxes, union dues, and other deductions must also be accounted for, making the process more complex.
