why wages and salaries comes in both trading account & profit & loss account ?
why wages and salaries comes in both trading account & profit & loss account ?
The revenue expenditures that are related to the production of goods and services (i.e. expenses incurred in the factory) are considered as direct expenses and are charged from the Trading Account. While all other revenue expenditures except direct expenses like, office and selling expenses etc. (i.e. expenses incurred in the office) are considered as indirect expenses and are charged from the Profit and Loss Account.
While Wages and Salaries are charged from the Trading Account, Salaries and Wages are charged from the Profit and Loss Account. The term ‘Wages and Salaries’ implicitly means ‘Wages’, on the other hand, the term ‘Salaries and Wages’ implicitly means ‘Salaries’. Wages (or Wages and Salaries) are shown on the debit side of the Trading Account, as these are the factory expenses and are incurred to carry out the production process. On the contrary, Salaries (or Salaries and Wages) are shown on the debit side of the Profit and Loss Account, as these are the office expenses and are incurred to carry out post-production process.
The revenue expenditures that are related to the production of goods and services (i.e. expenses incurred in the factory) are considered as direct expenses and are charged from the Trading Account. While all other revenue expenditures except direct expenses like, office and selling expenses etc. (i.e. expenses incurred in the office) are considered as indirect expenses and are charged from the Profit and Loss Account.
While Wages and Salaries are charged from the Trading Account, Salaries and Wages are charged from the Profit and Loss Account. The term ‘Wages and Salaries’ implicitly means ‘Wages’, on the other hand, the term ‘Salaries and Wages’ implicitly means ‘Salaries’. Wages (or Wages and Salaries) are shown on the debit side of the Trading Account, as these are the factory expenses and are incurred to carry out the production process. On the contrary, Salaries (or Salaries and Wages) are shown on the debit side of the Profit and Loss Account, as these are the office expenses and are incurred to carry out post-production process.
