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How is wage treated in trading account?
In fact, by whatever name called, any remuneration paid to an employee will be treated as 'salary' or 'wages'. In final accounts the wages will be show as debited to Trading A/C whereas salary will be debited to Profit & Loss A/C.
How is wages treated in trading account?
Wages or Salary or Labor or Direct wages or Direct labor: Wages or salary incurred in a business is direct which are shown in debit side of trading account. Other wages are indirect wages which are debited to profit and loss account.
How is wages treated in trading profit and loss account?
Wages or Salary or Labor or Direct wages or Direct labor: Wages or salary incurred in a business is direct which are shown in debit side of trading account. Other wages are indirect wages which are debited to profit and loss account.
What type of expense is wages?
Wage expense is the cost incurred by companies to pay hourly employees. This line item may also include payroll taxes and benefits paid to employees. Wage expense may be recorded as a line item in the expense portion of the income statement. This is a type of variable cost.
How do you calculate salaries and wages?
Make permissible deductions for salaried employees based on their daily or hourly rate. Daily rate example: $50,000 (annual salary) / 26 biweekly pay periods / 10 days = $192.31. Hour rate example: $53,000 (annual salary) / 52 weekly pay periods / 5 days / 8 hours = $25.48. Withhold applicable payroll taxes.
How do you account for wages payable?
Wages payable refers to the wages that a company's employees have earned, but have not yet been paid. Under the accrual method of accounting, this amount is likely recorded with an adjusting entry at the end of the accounting period so that the company's balance sheet will include the amount as a current liability.
Why wages comes in trading account?
When salary and wages come together(wages and salaries) it will be posted to trading account. Whatever comes with wages will go only to trading account Because in trading account we post the expenses which took place in the time of trading. Wages are also given at the time of trading, so it comes to trading account.
What type of account is wages?
Wages expense is an expense account, whereas wages payable is a current liability account. A current liability is one that the company must pay within one year. The company presents its expense accounts on the income statement and its liability accounts on the balance sheet.
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