When recording an accrual for salary expense, which accounts are primarily affected?

When recording an accrual for salary expense, the primary accounts affected are Salaries Expense and Salaries Payable. The accrual method of accounting recognizes expenses when they are incurred, regardless of when payment is made.

In this case, when a company incurs salary expenses for work performed by employees but has not yet paid them, it records the expense in the Salaries Expense account. This reflects the cost of labor that has been utilized in the reporting period, thereby adhering to the matching principle of accounting, which aims to align expenses with the revenues they help generate within the same period.

Simultaneously, the company also records a liability in the Salaries Payable account. This account represents the obligation to pay the employees in the future for the work they have already done. By doing this, the company acknowledges the amount that it owes, ensuring that both the expense and the corresponding liability are accurately reflected in its financial statements.

This systematic recording not only gives a more accurate picture of the company's financial status but is also crucial for maintaining compliance with accounting standards.