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What is paid telephone bill journal entry?

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  1. A company incurs several expenses arising from its operating activities. For example, rent, rates, taxes, telephone bills, electricity bills, etc. It is important to record the same in the books of accounts to ascertain the true financial position of a company.

    Journal entry for paid telephone bill

    The telephone charges a/c is debited and the respective cash or bank a/c is credited.

    1. According to the golden rules of accounting:

    Telephone charges a/c Debit Debit  all expenses and losses
    To Cash a/c Credit Credit what goes out

    (being telephone bill paid)

    2. According to the modern rules of accounting:

    Telephone charges a/c Debit Debit the increase in expense
    To Cash a/c Credit Credit the decrease in asset

    (being telephone bill paid)

    Example

    ABC Ltd. paid the telephone bill amounting to 10,000. The journal entry in the books of ABC Ltd is as follows:

    Telephone charges a/c Debit 10,000
    To Cash a/c Credit 10,000

    (being telephone bill paid)

    Hope this helps.

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