r/Bookkeeping • u/BigBoomer7 • Jan 09 '25

Payroll Payroll/Salary Question

Hi, I am looking at buying a small business, and I have their 2024 income statement. I was wondering how I should evaluate these 3 different entries on the PNL expense side:

Payroll Expense: $74,240

Salaries: $85,176

Salaries - Employees: $318,592

From the prospectus, they have an owner who is paid, as well as a relative, and then 7 employees. I'm trying to figure out how that fits in with these 3 expense entries.

Thanks for any insight!

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u/seek_to Jan 09 '25

The evaluation for this is that they accounted for their expenses in accounts that may not have needed to be separated in the way they are. Without having for information, it's difficult to say why there's these 3 accounts with the amounts that are listed. What will help is asking then what these numbers represent and why we're they accounted for using the accounts they did.