Home/Questions/Q 61099
Next
In Process
Amara Sani
In:

What is paid wages in cash journal entry?

journal entrywages
Share

    1 Answer

    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 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

      ParticularsL.F.AmountNature of AccountAccounting Rule
      Wages a/c XXXNominalDebit- All expenses and Losses
       To Cash a/c  XXXRealCredit- What goes out of the business.

      (Being paid wages in cash)

      2. Modern Accounting Approach

      ParticularsL.F.AmountNature of AccountAccounting Rule
      Wages a/c XXXExpenseDebit- The Increase in Expense
       To Cash a/c  XXXAssetCredit- 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.

      DateParticularsL.F.AmountNature of AccountAccounting Rule
      4th MarchWages a/c 40,000ExpenseDebit- The Increase in Expense
        To Cash a/c  40,000AssetCredit- The Decrease in Asset.

      (Being wages paid in cash)

      Hope this helps.

      • 0

    Leave an answer

    You must login to add an answer.