Question

Wages paid for installation of asset should be debited ___________ A/c.

• A. Wages
• B. Asset
• C. Cash
• D. Suspense

Answer 1

Answer: (B)

Asset

Any expenditure incurred on the carriage and installation of asset such as freight, transit expenses, installation expenses, wages etc, should be treated as capital expenditure and should be debited to the Asset A/c. This expenditure is non-recurring in nature and, thus, added to the value of the asset. Thus, it should be debited to the Asset A/c and not to the Wages A/c.