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Hi sir, I was reading the technical article and found below example on double entry:
Example: Factory employees are used for plant maintenance:
Correct entry:
Debit: Plant maintenance
Credit: Factory wagesIs the ‘Factory wages’ here a wage payable, which is a liability? Because if it’s an expense, it shouldn’t be on the credit side. Could you please explain, thank you sir!!! 🙂
There is very little (if any) double entry tested in the actual exam (except in the case of process costing).
However, then wages are paid, the entry for all of them is Dr Wages Cr Cash
In this case, not all the wages will be classed as labour – some of them are overheads for plant maintenance and so these need removing from factory wages and be charged to plant maintenance instead.
So to do this: Cr Wages and Dr plant maintenance
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