Labour cost inputs and outputs

NotesQuiz

Accounting transactions relating to labour are recorded in the labour account

ACCA MA F2 B1biii/vii student material Labour account graph

Transactions for the labour account

  1. When gross wages are paid to employees, they are accounted for as

    Dr Labour A/c
    Cr Bank A/c

  2. When labour is used within a particular production process, the direct labour costs are transferred from the labour account using

    Dr Work in progress A/c
    Cr Labour A/c

  3. Indirect labour costs are transferred from the labour account to be grouped with other indirect costs using

    Dr Production overhead A/c
    Cr Labour A/c

NotesQuiz