Question

Select the most appropriate alternatives from those given below and rewrite the sentence :

Wages A/c is transferred to ________ A/c.
a) Trading A/c
b) Profit And Loss A/c
c) Trial Balance
d) Any

Answer 1

Wages account is transferred to Trading A/c.

Explanation:
Trading A/c records all the direct expenses of a firm in order to ascertain the gross profit or loss of the business. Direct expenses are directly related to the production of goods. Wages are the direct expenses of a business, as these are paid to the workers who are working in the factory and are classified as nominal accounts. These accounts are closed by transferring their balances to the Trading and Profit and Loss A/c. Thus, wages being a direct expense are transferred to the Trading A/c.