Do Salary Expenses Go on a Balance Sheet?

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The income statement, not the balance sheet, has salary expenses.
The income statement, not the balance sheet, has salary expenses. (Image: Drazen_/iStock/Getty Images)

Balance sheets function like a snapshot of the financial state of the company at a given point in time. Salaries do not appear directly on a balance sheet, because the balance sheet only covers the current assets, liabilities and owners equity of the company. Any salaries owed by not yet paid would appear as a current liability, but any future or projected salaries would not show up at all.

Income Statement

The income statement is a different financial statement that shows the cash flow of the company over a given period of time, such as a quarter or a full year. Salaries fall under "operating expenses" for the period. For example, if you have a quarterly income statement for a company and look under operating expenses, there should be a line item for salaries that shows how much the company spent on wages during that quarter.

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