How to record an Expense?
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HOW TO RECORD AN EXPENSE?
Before we look at how to record an expense. You should first know what a T account is and how to open a T account. You can learn about these two things here • How to open a T account? Expenses for the business motor vehicles of £100 were paid by cheque. The money paid can be identified as motor expenses and therefore we will name the account Motor Expenses. This is identified as an expense and so we would enter the details on the debit side of the T account. Let’s assume that the transaction took place on the 11th May 2016 which can be shown as 11/5/16. Then we will note it as bank in the detail column because that is the name of the other account that has been affected. And finally 100 is entered in the £ column. The wages for the employees of £400 have been paid in cash. The money paid can be identified as wages and therefore we will name the account Wages. This is also identified as an expense and so we would enter the details on the debit side of the T account. Let’s assume that the transaction took place on the 20th May 2016 which can be shown as 20/5/16. Then we will note it as cash in the detail column because that is the name of the other account that has been affected during the transaction. And finally 400 is entered in the £ column. Then monthly interest of £15 for the bank loan was paid. The loan interest can be identified as bank loan interest and therefore we will name the account Bank Loan Interest. This is also identified as an expense and so we would enter the details on the debit side of the T account. Let’s assume that the transaction took place on the 22nd May 2016 which can be shown as 22/5/16. Then we will note it as bank in the detail column because that is the name of the other account that has been affected during the transaction. And finally 15 is entered in the £ column.
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