Question

Salaries and Wages appearing in Trial Balance are shown:

• A. On the debit side of Trading Account
• B. On the debit side of Profit & Loss Account
• C. On the Liabilities side of the Balance Sheet
• D. On the assets side of the Balance Sheet

Answer 1

Answer: (B)

On the debit side of Profit & Loss Account

Profit and loss account include expenses and incomes which are not included in the trading account, Salaries and wages are debited to the profit and loss account as these are non-manufacturing expenses. When salaries and wages appear individually in the trial balance then wages are debited to the trading account and salaries debited to the profit and loss account, but when they are together, they are treated as one and is debited to the profit and loss account.