Similarities & Differences Between Salaries Expense And Accrued Salaries / Salaries Payable

1. Salaries Expense is the amount which is paid to the employees by the company in the current accounting period and it is called Indirect Expense categories under Operating Expense In Income Statement while Accrued Salaries is the amount payable at some future date to employees who already delivered their task for the respective tasks or projects, so it is a Current Liability shown on Balance Sheet.

2. Salaries and Salaries Payable are the two accounting terms used in the accounting period and these are changed with each other means that when the company paid salaries to employees in the current month, then it becomes Salaries Expense and when it is not paid eventhough the employees earned it then it becomes Salaries Payable. So, in the whole accounting period, either there is record for Salaries Expense or Salaries Payable in the Financial Statements.

3. Salaries Expense operates under Cash Basis of Accounting while Accrued Salaries works on Accrual basis of Accounting.

Similarities Between Salaries Expense And Accrued Salaries

Both are used to run the business smoothly. For Examples, Salaries Expense is paid to employees who works on daily working tasks of the company, i.e., a sales manager’s tasks is to promote products and attract customers in order to generate Sales for the company. Similarly Salaries Payable is used to operate the business effectively and later on these are reversed on the next accounting period. For Example, if the employees done the job in the current accounting period, then it is ensured that they do the job well so they are paid by the company following the month after they delivered their respective tasks on time.