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hi actually i have a little bit confusing question regarding partenrs salaries
i mean when partners receive salaries we recorded the transaction as
Dr. salaries
Cr.bank
so they are included in the income statement as cash spend really on it
on the other hand we also present them in the partner’s current account
please am i understand the transaction well , or we don’t recognize them at all just make a disclosurewaiting your reply
Partners’ salaries are not salaries in the same way that an employee of the business will be paid a wage or salary, beacuse partners’ salaries are an appropriation of profit, and not an expense in the income statement of the business.
So they are NOT included in the income statement.
They are entered on the Dr. side of Appropriation Account and on the Cr. side of Partners’ Current Accounts.
The two entries are:Dr. Appropriation Account
Cr. SalariesDr. Salaries
Cr. Partners’ Current AccountsHope this is clear.
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