Journal Entry for Operating Expenses | Expense Paid

 

 

Manufacturing expenses

Manufacturing account is prepared by manufacturing company.

Manufacturing company purchases raw materials and converts raw materials into work in progress (WIP) and finished goods.

To convert raw materials into WIP and finished goods, different expenses and overheads are needed.

Some manufacturing expenses are:

store consumed

coal, gas, stem, water

heat, light and power

royalty (for manufacturing)

wages (productive)

coolie expenses

motive power

factory insurance

repairs to factory building

repair to plant and machinery

depreciation on factory assets

other factory expenses

These expenses are debited in journal entry and manufacturing account or trading trading.

 

Administrative expenses | office expenses | operating expenses

All the costs related to management and administrative of the organization is known administrative expenses.

These expenses are incurred day-to-day office activities.

Some office expenses are:

office salary

management expenses

office expenses

office rent etc.

These expenses are debited in journal entry and profit and loss account.

 

Selling and distribution expenses

Expense which is incurred or paid to sales of goods or service providing is known selling expenses.

This expense also includes distribution expenses. 

It is also known secondary packaging expenses.

Some selling and distribution expenses are:

godown (warehouse) rent

advertisement

expenses of delivery van etc.

These expense are debited in journal entry and profit and loss account.

 

Expenses Paid

Salary account Wages account Rent account Telephone and internet bill Stationery account Electricity and water bill    Interest and commission Other expenses account            To Cash account            To Bank account (Being- ….expenses paid by

Dr Dr Dr Dr Dr Dr Dr Dr

salary paid to person wages paid to person rent paid to house owner telephone and internet bill   stationery purchased electricity and water bill  interest and commission paid other expenses paid paid in cash paid by cheque

Increase in expenses Increase in expenses Increase in expenses Increase in expenses Increase in expenses Increase in expenses Increase in expenses Increase in expenses   Decrease in assets Decrease in assets

 

Journal Entry

In the book of …………

Date	Particulars		LF	Amount Dr	Amount Cr
	Salary expense account    Wages expense account    Rent expense account Telephone and internet bill account Stationery expense account Electricity and water bill account Interest and commission expense account Other operating expenses account         To Cash account         To Bank account (Being: ….expenses paid)	Dr Dr Dr Dr Dr Dr Dr Dr		xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx	xxxxx xxxxx

 

PROBLEM: 9A

The following expenses are given you by KL Fancy House:

20 March, Stationery purchased for $540.

30 March, Salary expense paid to staff for the month of March $45,000.

30 March, Rent expense paid to house owner for the month of March $12,460 by cheque.

Required: Journal entries

SOLUTION:

Journal Entry for American Style

Date			Debit  $	Credit $
Mar, 20	Stationary account                                                                    Cash account To record purchase of stationary for cash		540	540

 

Journal Entry for European Style

Date			€	€
Mar, 20	Stationary account                                                                              Cash account To record purchase of stationary for cash	Dr	540	540

 

Journal Entries

In the book of KL Fancy House 

Date	Particulars		LF	Amount Debit	Amount Credit
20 March	Stationery expense account           To Cash account (Being- stationery purchased in cash)	Dr		540	540
31 March	Salary expense account          To Cash account (Being- salary paid to staff in cash)	Dr		45,000	45,000
31 March	Rent expense account          To Bank account (Being- rent paid to house owner by cheque)	Dr		12,460	12,460

 

 

#####

Click on link for YouTube videos

ACCOUNTING EQUATION  http://tiny.cc/c89jkz

BASIC JOURNAL ENTRIES IN NEPALI http://tiny.cc/uaakkz

BASIC JOURNAL ENTRIES http://tiny.cc/8aakkz

JOURNAL ENTRY AND LEDGER http://tiny.cc/caakkz

LEDGER http://tiny.cc/haakkz

SUBSIDIARY BOOK http://tiny.cc/399jkz

CASH BOOK http://tiny.cc/889jkz

TRIAL BALANCE & ADJUSTED TRIAL BALANCE http://tiny.cc/c59jkz

BANK RECONCILIATION STATEMENT (BRS) http://tiny.cc/q59jkz

DEPRECIATION http://tiny.cc/ugakkz

FINAL ACCOUNT: CLASS 11 http://tiny.cc/y89jkz

ADJUSTMENT IN FINAL ACCOUNT http://tiny.cc/keakkz

CAPITAL AND REVENUE http://tiny.cc/peakkz

SINGLE ENTRY SYSTEM http://tiny.cc/n19jkz

NON-PROFIT ORGANIZATION (NON-TRADING CONCERN http://tiny.cc/j09jkz

GOVERNMENT ACCOUNTING http://tiny.cc/hcakkz

GOSWARA VOUCHER (JOURNAL VOUCHER) http://tiny.cc/hcakkz

###########

 

PROBLEM: 9B

The following expenses are given you by VK Footwear Suppliers:

28 April, Salary paid to Mr Prakash for the month of April $15,725.

29 April, Rent paid to house owner Ms Sarita for the month of April $10,300 by cheque.

30 April, Internet expenses paid to Broadlink Solution (P) Ltd $1,540.

Required: Journal entries

Journal Entries

In the book of VK Footwear Suppliers 

Date	Particulars		LF	Amount Dr	Amount Cr
28 April	Salary account          To Cash account (Being- salary paid to Mr Prakash in cash)	Dr		15,725	15,725
29 April	Rent account          To Bank account (Being- rent paid to house owner Ms Sarita by cheque)	Dr		10,300	10,300
30 April	Internet expenses account          To Cash account [Being- internet expenses paid to Broadlink Solution (P) Ltd]	Dr		1,540	1,540

 

Keep in Mind (KIM)

Mr Prakash, Ms Sarita and Broadlink Solution (P) Ltd are personal accounts. Expenses paid to personal accounts are not debited. Because, expenses paid to person or organization does not affect personal accounts.

Basic Problem: 9                   EXPENSES PAID

The following expenses are given you by KP Trading House:

(a) Salary paid to office staff for the current month  $35,320.

(b) Rent paid to house owner $15,000 by cheque.

(c) Stationery purchased for $530.

(d) Commission paid to Ms Arpita $5,625 by cheque.

(d) Cash discount allowed to M/s Sharma Traders $2,970.

(e) Electricity expenses paid to Nepal Electricity Authority $1,690.

Required: Journal entries

***********

Thank for investing your time.

Please comment on article.

You can help me by sharing this article at your social media platform.

 

Jay Google, Jay YouTube, Jay Social Media
जय गूगल, जय युट्युब, जय सोशल मीडिया