How do payroll-related expenses affect financial statements? (You may select mor

Question

How do payroll-related expenses affect financial statements? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

Payroll expenses reduce the net income of a company. The perlod's gross earnings are reported on the Income Statement Payroll expense accounts are reported on the Balance Sheet Payroll expenses may be allocable to work performed for a firm's customers.

Explanation / Answer

The followings two options are correct.

Payroll expenses reduce the net income of a company.

The period's gross earnings are reported on the Income Statement.

Explanation:

Being an expenses, Payroll-related expenses affects the income statement by reducing the net income. therefore this option is correct.

The gross earnings of an employee is an expenses to the company. therefore the same amount are reported as an expenses on the Income Statement.

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