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Accounting for salaries paid to employees involves journal entries when employees perform work and are owed money. Salaries expense is debited, salaries payable is credited for the amount owed, reducing net income and increasing current liabilities. Payroll taxes, union dues, and other deductions also need to be accounted for, including federal income tax withholding. When the employer pays the employees, salaries payable is debited and cash is credited, reducing the liability. The process is more complex due to additional factors like payroll taxes and deductions.
