Expense Entries

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1 Expense Entries

2 Expense Entry in Text Books

3 Expense Entry in Practical Life

4 Record Expense Entry in TallyPrime

5 Share this:

6 Related

Expense Entry in Text Books

We record entry in text books

Expense A/c – Dr.

To Party/ Cash / Bank A/c

later, we have to close the ledger and transferred to profit and loss A/c

Profit and loss A/c – Dr.

To Expense A/c

Expense Entry in Practical Life

We follow the concept of double entry

1.First entry -we book expense

Expense A/c- Dr.

To Party A/c

( Being Expense booked or Bill/ Invoice is received)

2. Second entry when payment is made

Party A/c- Dr.

To Bank/ Cash A/c

( Being payment made to party)

In practical life the transfer entry is not done it is automatically done by software like Tally.

Record Expense Entry in TallyPrime

Suppose we are in the business of consultancy and we need the internet to do lots of research and to provide consultancy on the fingertip. Internet bill received from Hathway Rs. 4,000/- received on 1st March, 2021 and online payment made on 2nd March, 2021.

We need the following ledgers:

1.Internet Exp. A/c – Under Direct/Indirect Expense. 2. Hathway A/c- Under Sundry Creditors. 3. Bank A/c

When we book entry on the 1st March 2021 the Internet Expense will be visible in Profit and Loss A/c and Hathway A/c in the balance sheet under sundry creditors. So let’s book entry. Click on the image.

Internet Exp. A/c Dr. 4000

To Hathway A/c 4000

Now when we made payment to Hathway on 2nd March, 2021 the ‘Hathway A/c’ will not be visible in sundry creditors as we made full payment so there is no balance.

Hathway A/c – Dr. Rs. 4000

To Bank A/c (HDFC) Rs. 4000

Click on the image so that it will be clearly visible.