Question

when farm products are consumed by farm workers it is debited​

Answer 1

Answer:

The farm accounting is a technique of using accounting data for cost and profit ascertainment of each farming activity and decision making with regard to the most profitable line of activity.

Answer 2

Answer:

Wages Account

Explanation:

Journal Entry-

Wages A/c Dr.   xxx

        To Farm Products   xxx

(Being farm products consumed by farm workers )

Wages Account-

• The wages account is a nominal account as it is an expense account. Hence, the golden rule of accounting applicable is "Debit all expenses and losses and credit all income and gains."
• Under the accrual basis of accounting, the account Wages Expense (or separate accounts such as Wages Expense) is used to record the amounts earned by employees during the accounting period.

The farm products consumed by the farm workers is in the form of payment made to them instead of cash payment.

Therefore it will be considered as wages payment and hence an expense which will be debited as per the Golden Rules of Accounting.

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