Does accrued wages go in the P/L statement???

[molllz]

Hey

Does accrued wages go under the "other expenses" section of the p/l statement?

e.g $800 of expenses for july... half is paid in july and the other half is paid in August?

Would the p/l statement just say:::: 1----- wages: 800   OR

                                                    2---- wages: 400
                                             accrued wages: 400

thanks

[RossiJ]

P and L for July and August (so end of August)

Other Expenses
Wages Expense (800)

---- DONT WRITE ACCRUED OR PREPAID (revenue or expenses) IN THE P/L AS THE P/L ONLY RELATES TO THE REPORTING PERIOD (NOT PAST OR FUTURE ONES).

[MaddehZ]

BDA would recognise the 400 accrued as wages expense


wages expense 800

[mba]

You add the accured amount to the relevant line item in the profit and loss. In this case it would be wages .... an accrued expense is one that has been incurred but not yet paid.

To fulfil the matcing principle (expenses incured are matched to revenues earnt) we include the accrued wages in the wages expense in the P&L. So the accounting equation balances we then credit the liabilities section of the balance sheet to recognise that we will need to pay the wages at a future date.

Therefore
Wages expense DR 400
  Accrued Wages CR 400

Thus:

Wages Expense = 800 (Other Expense in Profit and Loss)

Accrued Wages = 400 (Liability in Balance Sheet)