Accounting

We answer your accounting questions.

Over 500 questions have been answered on our accounting blog.

 accounting blog

May 27, 2009

Are salaries and wages part of expenses on the income statement?

Salaries and wages of the current accounting period are reported as expenses on a service company’s current income statement.

Salaries and wages of a manufacturer are more complicated. The salaries and wages of people in the administrative and selling functions are reported as expenses on the current income statement. However, the salaries and wages of people in the production departments are assigned to the products manufactured. When the products are sold, their production costs (including the manufacturing salaries and wages) will appear on the income statement as part of the cost of goods sold. The products not sold are reported as inventory on the balance sheet at their production costs (including the manufacturing salaries and wages).

Related Questions
the accounting coach

About the Author: Harold Averkamp (CPA) has worked as an accountant, consultant, and university accounting instructor for more than 25 years.

He is the author of the 2010 Master Accounting Download Package which has been praised for it's ability to simplify accounting in a way that anybody can understand.



 Accounting Exams

Accounting Exams
Printable (PDF) Exams on 16 financial accounting topics and 19 managerial accounting topics. More Info...

     Accounting Bookkeeping Test

Bookkeeping Test
Test your bookkeeping skills. Printable (PDF) Bookkeeping Test with 175 total questions. More Info...

 Accounting Forms

Business Forms
Our Master Set of 80 Business Forms will assist you in preparing financial statements, financial ratios, break-even calculations, depreciation, standard cost variances, and more. More Info...


Comments

6 Responses to “Are salaries and wages part of expenses on the income statement?”

  1. John Eteng on June 3rd, 2009 3:03 pm

    Please, what are Treasury Bills?

  2. qudsia ahmadi on June 11th, 2009 6:20 am

    what is bad debit?

  3. Ikram on June 12th, 2009 11:09 pm

    What is the difference between Applied Factory Overhead and Budgeted Factory Overhead?

  4. pedro on July 13th, 2009 9:02 am

    why is it that wages are not treated as revenue expenditure in a profit and loss account while salaries are treated like that?

  5. Abdalla on July 26th, 2009 1:53 pm

    How quickly understand th difrence between salaries and wages that can’t ne treated as part of an income statement.

  6. Razzy on December 26th, 2009 11:48 am

    I will like to know the difference trade and cash discount. Thank you

Leave a Reply