Statement of Profit and Loss (P/L): Salaries and wages are shown under Employee benefit expense

Salaries and wages are an important expense for any organization. These expenses include the remuneration paid to employees for their services and are a significant part of the overall cost of running a business. In the Statement of Profit and Loss (P/L), salaries and wages are categorized under the heading of Employee benefit expense.

Explanation:

The Statement of Profit and Loss, also known as the Income Statement, is a financial statement that summarizes the revenues, expenses, and profits or losses of a company over a specific period of time. It provides valuable information about the company's financial performance and helps in assessing its profitability.

Employee benefit expense:

1. Definition: Employee benefit expense refers to the costs incurred by the company in providing various benefits to its employees. These benefits may include salaries, wages, bonuses, commissions, pensions, healthcare, insurance, and other perks.

2. Inclusion in the Statement of Profit and Loss: Salaries and wages paid to employees are an integral part of the employee benefit expense. They are directly associated with the compensation provided to the employees for their services rendered during the accounting period.

3. Separate classification: Salaries and wages are usually shown as a separate line item under the employee benefit expense section in the Statement of Profit and Loss. This allows for better analysis and understanding of the company's payroll costs.

4. Importance: Salaries and wages are significant expenses for most businesses, especially those that heavily rely on human resources. These expenses directly impact the company's profitability. Therefore, it is crucial to accurately record and analyze these costs in the financial statements.

5. Other expenses: While there may be other expenses incurred by the company, such as rent, utilities, depreciation, marketing, etc., salaries and wages are not categorized under other expenses. Other expenses generally refer to non-operating expenses or those that are not directly related to the production of goods or services.

In conclusion, salaries and wages are shown under the heading of Employee benefit expense in the Statement of Profit and Loss. It is important to accurately record and analyze these expenses as they directly impact the company's financial performance and profitability.