Question

Wages and salaries are shown in the —.

• A. Trading A/c
• B. Profit and Loss A/c
• C. Balance Sheet
• D. Cash Flow Statement

Answer 1

Answer:

A. Trading A/c

• Wages and salaries are direct expenses, meaning they are incurred during the manufacturing or production process.

• Trading Account records all direct expenses and direct incomes (like sales, purchases, wages, carriage inward, etc.) to determine Gross Profit or Gross Loss.

• Therefore, wages and salaries appear on the debit side of the Trading Account.

• If the item was written as “Salaries and wages” (reverse order), it is generally treated as an indirect expense and shown in the Profit & Loss Account.

• But since the question says “Wages and salaries”, it refers to direct expenses, so the answer is: Trading A/c.