A business firm spends money for various type of expenses. Normally, the accounts heads are assigned to those expenses which are repeatedly incurred. But there are so many expenses for which no account heads can be created because of very few transactions for certain expenses. If an accountant creates individual account heads for such type of transactions, then it will be very difficult to control. Therefore, all these expense are booked under miscellaneous expenses account or general expenses account. For example:- very small amount paid for donations or charities, membership fees for local organizations, short and excess amount written off, festival celebration expenses and other expenses for which no account head is available.
Accounting Treatment of Miscellaneous Expenses
In case of payment in cash or by cheques:-
Entry to be made
Debit:- Miscellaneous Expenses Account
General Expenses Account
Credit:- Cash Account
Treatment of Miscellaneous Expenses in Final Accounts
Miscellaneous expenses are indirect expenses and are shown in expenses side of profit and loss account.
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