Question

What will be the journal entry of paid telephone expenses by cheque

Answer 1

Answer:

Two approaches for recording the Paid telephone charges journal entry are there in present. It can directly hit the  expenses of telephone and bank account. So, the bill is debited,  and therefore the bank account will be credited.

The alternative approach is to accrue the expenses by recording:

• Telephone expenses and Liability Accounts  are going to be  on the debit and credit side of the journal entry respectively.
• The liability Account and  checking account  will be on the debit side and credit side of the Entry respectively.

Therefore,  the average Entry will knock off the Liability account, telephone expenses  are going to be  on the debit side, and Bank Accounts  are going to be  on the credit side.

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Answer 2

Answer:

Telephone expenses a/c Dr. xxx

                            To Bank A/c       xxx

(Being telephone expenses paid by cheque)

Explanation:

An example of an indirect disbursement is telephone charges. These do not appear to be ordinary office/fax/toll-free/call centre expenses. It will, however, include reimbursements for voice/data plans for its employees.

"The Golden Rules of Accounting are-

Rule 1: Debit What Comes In, Credit What Goes Out.

Rule 2: Debit the Receiver, Credit the Giver.

Rule 3: Debit All Expenses and Losses, Credit all Incomes and Gains."

• Telephone charges are expenses and fall under the Nominal Account category of the Golden Rules of Accounting.
• Because phone expenses are expenses, the telephone expense account will be debited.
• All expenses paid with a cheque are debited from the bank account.
• Because the bank account is a personal account, Rule 2 will apply, and the bank account will be credited because it is the giver.

Hence, we will conclude that, payment of any expense by cheque will debit the travel and entertainment account and credit the checking account.

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