Expenses are incurred but not yet been paid called as accrued expenses such as wages, salaries, telephone expenses etc.
Example 1, Telephone expenses incurred for the period of April 2017 is Rs.6,000, but not yet been paid during the month. The due date for payment of telephone expenses is 10th of May 2017.
Accounting Entry on 30th April 2017
Telephone Expenses A/c Dr – 6,000
To Telephone Expenses Payable A/c – 6,000
Payment Entry on 8th May 2017
Telephone Expenses Payable A/c Dr – 6,000
To Bank A/c – 6,000
Example 2, Salary incurred for the period of April 2017 is Rs.50,000, but not yet been paid during the month. The due date for payment of salary is 5th of the following month i.e. May 2017.
Salary A/c Dr – 50,000
To ESI Employee Contribution A/c – 1,000
To PF Employee Contribution A/c – 3,000
To TDS on Salaries A/c – 4,000
To Professional Tax Payable A/c – 200
To Salary Payable A/c – 41,800
Payment Entry on 5th May 2017
Salary Payable A/c Dr – 41,800
To Bank A/c – 41,800
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