Journal Entry for Expenses paid through Bank

Journal Entry for Expenses paid through Bank

In this article we would discuss the journal entry for expanses paid through bank. The expense shall be debited being increase in expense and bank shall be credited being decrease in asset.

Date	Particular	Ledger Folio	Dr.	Cr.
01-01-2017	Expenses A/c		xxx
01-01-2017	Bank A/c			xxx

We know that there are two rules for recording the journal entry for expenses.

·         Increase in expense is Debit.

·         Decrease in expense is Credit.

Similarly there are two rules for recording the journal entry for assets.

·         Increase in asset is Debit.

·         Decrease in asset is Credit.

Examples of Journal Entry for Expenses paid through bank

1.    Rent paid in through cheque 98,000.

2.    Salary paid by internal bank transfer to employees 45,000.

3.    Stationary purchased and payment made through cheque amounting 15,000.

4.    Repairs bills paid through crossed cheque 19,000.

Rent shall be debited being increase in expense and bank account would be credited being decrease in asset with amount of 98,000/-

Date	Particular	Ledger Folio	Dr.	Cr.
02-12-2017	Rent		98,000
02-12-2017	Bank			98,000

In second example the Salary shall be debited as increase in expense and Bank account shall be credited being decrease in asset.

Date	Particular	Ledger Folio	Dr.	Cr.
03-01-2017	Salary		45,000
03-01-2017	Bank			45,000

Stationary of PKR 15,000 shall be debited being increase in stationary expense and the bank shall be credited with same amount under the asset recording rules.

Date	Particular	Ledger Folio	Dr.	Cr.
05-10-2017	Stationary		15,000
05-10-2017	Bank			15,000

Repair of 19,000/- shall be debited and banks shall be credited with same amount under the expense and asset rules for recording the journal entry.

Date	Particular	Ledger Folio	Dr.	Cr.
03-10-2017	Repair		19,000
03-10-2017	Bank			19,000