Monday, 2 October 2017
Tuesday, 25 July 2017
Journal Entry for Payment for Expenses
Journal Entry for Payment for Expenses
In this article we would discuss
the journal entry for payment of expenses. The expense shall be debit as
increase and payment shall be credited. There are two possible ways of paying
the expenses i.e. cash payment and bank payment.
Journal Entry for Payment of Expenses- Bank
Journal for bank payment of
expenses shall be recorded by debiting the expense and crediting the bank. Expense
is debit being increase in expense, while bank is decrease as decrease in
asset.
Date
|
Particular
|
Ledger Folio
|
Dr.
|
Cr.
|
Expense
|
xxx
|
|||
Cash
|
xxx
|
Journal Entry for Payment of Expenses- Cash
Journal entry for cash
payment of expense shall be recorded by debiting the expense and crediting the
cash. The expense is debited being increase and cash is credited for a decrease
in asset.
Date
|
Particular
|
Ledger Folio
|
Dr.
|
Cr.
|
Expense
|
xxx
|
|||
Cash
|
xxx
|
Examples of Journal Entries of Payment of Expenses
1. Payment
of Salary in cash 10,000/-
2. Payment
of Repair through cheque 12,000/-
The above transaction shall
be recorded by debiting the expense and crediting the cash/bank as shown below;
Date
|
Particular
|
Ledger Folio
|
Dr.
|
Cr.
|
Salary
|
10,000
|
|||
Cash
|
10,000
|
Date
|
Particular
|
Ledger Folio
|
Dr.
|
Cr.
|
Repair
|
12,000
|
|||
Cash
|
12,000
|
Monday, 24 July 2017
Journal Entry for Payment
Journal Entry for Payment
In this article we would
discuss the journal entry for payment in details. We know that payment can be
made either by cash or through cheque. Journal entry for payment is recorded by
crediting the cash or bank (as case may be). The bank or cash is credited being decrease in asset and other aspect
shall be debited.
Journal Entry for Payment of Expenses
Journal entry for payment of
expenses is recorded by crediting the bank/cash and debiting the expense. For
example salary paid in cash amounting 24,000 shall be recorded as under;
|
Date
|
Particular
|
Ledger Folio
|
Dr.
|
Cr.
|
|
Salary
|
|
24,000
|
|
|
|
|
Cash
|
|
|
24,000
|
Journal Entry for Payment of Asset Purchased
Journal entry for payment
for purchase of asset shall be recorded by crediting the bank/cash and debiting
the asset purchased. For example machinery purchased amounting 28,000 shall be
recorded as under;
|
Date
|
Particular
|
Ledger Folio
|
Dr.
|
Cr.
|
|
Machinery
|
|
28,000
|
|
|
|
|
Cash/Bank
|
|
|
28,000
|
Journal Entry for Payment to Creditor
Journal entry for payment of
creditor shall be recorded by crediting the bank/cash and debiting the creditor
(being decrease in liability on payment). For example a creditor Mr.A is paid
an amount of 128,000 shall be recorded as under
|
Date
|
Particular
|
Ledger Folio
|
Dr.
|
Cr.
|
|
Ali
|
|
28,000
|
|
|
|
|
Cash/Bank
|
|
|
28,000
|
Journal Entry for Payment of Tax
There are two possible
situation of payment of tax, one direct payment of tax (there is not tax
liability in the books of account). Other is payment of tax liability appearing
in the books of account.
Direct
payment of Tax
Direct payment of tax is
charged as expense and cash is credited.
|
Date
|
Particular
|
Ledger Folio
|
Dr.
|
Cr.
|
|
Tax
|
|
14,000
|
|
|
|
|
Cash/Bank
|
|
|
14,000
|
Payment
of Tax liability
Tax liability is reduced
(tax expense has already been charged, when liability was created). Thus
liability is debited and cash is credited.
|
Date
|
Particular
|
Ledger Folio
|
Dr.
|
Cr.
|
|
Tax
Liability
|
|
14,000
|
|
|
|
|
Cash/Bank
|
|
|
14,000
|
Journal Entry for Payment of Tax
Journal Entry for Payment
In this article we would
discuss the journal entry for payment in details. We know that payment can be
made either by cash or through cheque. Journal entry for payment is recorded by
crediting the cash or bank (as case may be). The bank or cash is credited being decrease in asset and other aspect
shall be debited.
Journal Entry for Payment of Expenses
Journal entry for payment of
expenses is recorded by crediting the bank/cash and debiting the expense. For
example salary paid in cash amounting 24,000 shall be recorded as under;
Date
|
Particular
|
Ledger Folio
|
Dr.
|
Cr.
|
Salary
|
24,000
|
|||
Cash
|
24,000
|
Journal Entry for Payment of Asset Purchased
Journal entry for payment
for purchase of asset shall be recorded by crediting the bank/cash and debiting
the asset purchased. For example machinery purchased amounting 28,000 shall be
recorded as under;
Date
|
Particular
|
Ledger Folio
|
Dr.
|
Cr.
|
Machinery
|
28,000
|
|||
Cash/Bank
|
28,000
|
Journal Entry for Payment to Creditor
Journal entry for payment of
creditor shall be recorded by crediting the bank/cash and debiting the creditor
(being decrease in liability on payment). For example a creditor Mr.A is paid
an amount of 128,000 shall be recorded as under
Date
|
Particular
|
Ledger Folio
|
Dr.
|
Cr.
|
Ali
|
28,000
|
|||
Cash/Bank
|
28,000
|
Journal Entry for Payment of Tax
There are two possible
situation of payment of tax, one direct payment of tax (there is not tax liability
in the books of account). Other is payment of tax liability appearing in the
books of account.
Direct payment of Tax
Direct payment of tax is
charged as expense and cash is credited.
Date
|
Particular
|
Ledger Folio
|
Dr.
|
Cr.
|
Tax
|
14,000
|
|||
Cash/Bank
|
14,000
|
Payment of Tax liability
Tax liability is reduced (tax
expense has already been charged, when liability was created). Thus liability
is debited and cash is credited.
Date
|
Particular
|
Ledger Folio
|
Dr.
|
Cr.
|
Tax Liability
|
14,000
|
|||
Cash/Bank
|
14,000
|
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