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Accounting for salaries paid to employees involves journal entries when employees perform work and are owed money by their employer. Salaries expense is debited, and salaries payable is credited for the amount owed. This results in expense reduction on the income statement and liability increase on the balance sheet. When the employer pays the employees, salaries payable is debited, and cash is credited to reduce the liability. Payroll taxes, union dues, unemployment taxes, and federal income tax withholding add complexity to the process.
