Sign In

For the sake of quality, our forum is currently "Restricted" to invitation-only. In case if you wish to join our forum, please send an email seeking an invitation to "Contact@Accountingcapital.com".

Forgot Password

Lost your password? Please enter your email address. You will receive a link and will create a new password via email.

Captcha Click on image to update the captcha.

You must login to ask question.

Discy Latest Questions

  1. In this growing competitive world, every organization needs to retain its loyal and trustworthy staff members and make a timely payment towards wages and salaries to its workers and employees. Timely payment not only motivates and built the confidence of the workers and employees but also encouragesRead more

    In this growing competitive world, every organization needs to retain its loyal and trustworthy staff members and make a timely payment towards wages and salaries to its workers and employees. Timely payment not only motivates and built the confidence of the workers and employees but also encourages them to achieve organizations short term and long term goals.

    Journal Entry for wages paid in cash

    This entry can be recorded in the books of accounts by using two different approaches of accounting. They are-

    1. Traditional Accounting Approach

    Particulars L.F. Amount Nature of Account Accounting Rule
    Wages a/c   XXX Nominal Debit- All expenses and Losses
     To Cash a/c    XXX Real Credit- What goes out of the business.

    (Being paid wages in cash)

    2. Modern Accounting Approach

    Particulars L.F. Amount Nature of Account Accounting Rule
    Wages a/c   XXX Expense Debit- The Increase in Expense
     To Cash a/c    XXX Asset Credit- The Decrease in Asset.

    (Being wages paid in cash)

    Example

    On 4th March, Anna Ltd. makes a payment towards wages amounting to 40,000 in cash. Journalise the following transaction in the books of Anna Ltd.

    In the Books of Anna Ltd.

    Date Particulars L.F. Amount Nature of Account Accounting Rule
    4th March Wages a/c   40,000 Expense Debit- The Increase in Expense
       To Cash a/c    40,000 Asset Credit- The Decrease in Asset.

    (Being wages paid in cash)

    Hope this helps.

    See less
    • 0