Payment to labours

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This discussion clarifies the accounting treatment for payments made to labourers hired for warehouse stock sections and stock arrangement. The consensus is that these are direct expenses. The recommended journal entry involves debiting a 'Service & Labour Charge' account and crediting 'Bank/Cash'.

Abbas Ali Bohra

Abbas Ali Bohra (Querist)
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04 September 2023 I have hire a person to make stock section for my ware house and I am paying daily amount on his day work and also have hire some labours for arranging the stocks for a short period. It is which type of expense for making payment , direct or Indirect and how to make the entry?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 September 2023 It's direct expenses debit to labour charges.

RAJA P M

RAJA P M (Expert)
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04 September 2023 I agreed with Mr CA R SEETHARAMAN Sir... For Entry it's..... Dr. Service & Labour Charge A/c - Rs. XXXXX..... Cr. Bank/ Cash A/c - XXXXX

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