Wages are the expenses of a Business organization which is paid to person/persons against their work done for that Business organization.
Generally wages are not fixed in nature, it varies from time to time and it is paid within a short period of time.
Wages are paid hourly/daily/weekly basis.
Now let's discuss about the Journal Entry and Ledger posting procedure when Wages are paid through Cash.
On Cash Payment for Wages,
Wages Account shows Debit effect and,
Cash Account shows Credit effect.
Journal Entry
In Wages Ledger Account
In Cash Account
Example :
In the Books of M/s.Jagannath Industries amount paid towards wages by Cash for ₹1230/- on dt.20/11/2022
Pass necessary Journal Entry and Post them into their respective Ledger Accounts for Wages paid.
In the above example
Debit Ledger is :
- Wages Account
Credit Ledger is :
- Cash Account
Journal Entry
Posting in Wages Ledger Account.
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