If on a balance sheet a company has Wages Payable of $4,000; as an investor, should I be worried about the future cash position or net income position?
My confusion derives from the interpretation of the accrual basis whereby that wages payable amount has already been expensed due to the accrual method of accounting and therefore when assessing a company with these liabilities, what should I be cautious about?
For the purpose of this question, and just to confirm my knowledge on this topic, these wages payable will never affect the income statement in the future (should the amount remain the same), correct?
Study together. Pass together.
Join the world's largest online community of CFA, CAIA and FRM candidates.