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The journal for wages paid for erection of machinery 5000 rupees 1. Machinery account dr. 5000 To wages account. 5000 2. Wages account dr. 5000 To cash account. 5000 Or Machinery account dr 5000 Cash account. 5000 Which of the set should be recorded the first set of journal or directly the second set
Answers (5)
Thread Starter
lithish kumarBut, is first one not correct
Of wages or any other expense is done while the errection it is in considered the cost of machinery and not seperately e.g if price of mac hinery is 2000 and wages for errection are 100 the machinery will be of 2100 also further accounting such as depteciation is calculated on 2100
Thread Starter
lithish kumarBut, is first one not correct
No u can't do that because Wages is an expense which occurred to bring machinery into use. It cannot be treated separately from the machinery just like in depriciation where we calculate the cost of the asset.