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


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