Question

in company final accounts bonus paid to employees is treated as​

Answer 1

Answer:

Bonus and retirement benefit is debited in profit and loss. If such amount is paid, it is deducted from cash otherwise is shown in liability side of balance sheet.

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Answer 2

In company final accounts bonus paid to employees is recorded in Profit and loss account, its treatment is explained below​:

Explanation:

• Bonus and retirement benefit are the incentives which are provided to employees to encourage their better performance.
• Bonus is provided as allowance to the employees on the basis of the profit earned by the company.
• Bonus and retirement benefit is recorded in Profit and Loss account.
• It is debited in profit and loss.
• If such amount is paid, it is simply deducted from cash otherwise is shown in liability side of balance sheet.