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).
Are salaries and wages part of expenses on the income statement?
- What is recorded in the Wages and Salaries Expense account?
- Where do you account for payroll taxes on the income statement?
- What is the employer's Social Security tax rate for 2018 and 2019?
- How do I determine my payroll tax liabilities?
- What are wages payable?
- Under accrual accounting, how are worker comp premiums handled?