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Accounting for salaries paid to employees involves journal entries for salaries expense and salaries payable. When employees perform work, the employer debits salaries expense and credits salaries payable. Salaries expense reduces net income, while salaries payable increases current liabilities on the balance sheet. Payroll taxes, union dues, and other deductions must also be accounted for. When paying employees, the company debits salaries payable and credits cash.
