What are journal entry of expenses and income in accounting

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An expense in accounting is the money spent, or costs incurred, by a business in its effort to generate profit. Essentially, accounts expenses represent the cost of doing business; they are the sum of all the activities that hopefully generate a profit.

It is important to understand the difference between “cost” and “expense” since they each have a distinct meaning in accounting. Cost is the monetary measure (cash) that has been given up in order to buy an asset. An expense is a cost that has expired or been taken up by activities that help generate revenue. Therefore, all expenses are costs, but not all costs are expenses.

Some examples of expenses

Expense is nominal in nature as per nominal account Dr all Expenses and Losses, therefore, the expense is Debited in the books of Accounts

Nominal Accounts

Dr. All Expenses and Losses

Cr. All Income and gains

Journal entry of Expense

Rent paid for the month Rs 10,000

Rent is nominal accounts by nature and in this entry, rent is paid therefore it is expense and as per expense, we have to debit expense accounts.

Rent a/c

To Cash A/c

(being rent paid)

Travelling means moving from one city to other city for business purpose hence if we do any such activities that will comes under the expense for business therefore written in

Example Ram goes to Delhi and provide a bill of Rs 5000 hotel charges and Rs 500 for meal.

Particular

Amount

Travelling expense

5500

  To Cash A/c

(being travelling exp made)

   5500