Journal Entry and Ledger Posting for cash payment towards Electricity Expenses

In current days all the Individuals and Business units are using Electric power for maintenance of their Production Unit and Office.

The Electricity provider charges/bills towards consumption value on the users of Electric power.

Let's discuss how to record the transaction when Electricity Expenses are paid by Cash.

When Electricity Expenses are paid by Cash, the following Ledger Accounts are affected.

Electricity Expenses Account shows Debit effect.

Cash Account shows Credit effect.

Journal Entry

Journal Entry for Cash payment towards Electricity Expenses

Ledger Posting

In Electricity Expenses Account.

Cash payment towards Electricity Expenses - Posting in Electricity Expenses Ledger Account.

In Cash Account

Cash payment towards Electricity Expenses - Posting in Cash Account.

Example :

In the Books of M/s.Trimurthy Traders, amount paid to TPCODL for ₹420/- on dt.02/05/2021 as per Money Receipt No.300270

Pass necessary Journal Entry and Post them into their respective Ledger Accounts for the above transaction.

In the above example 

Debit Ledger is :

  • Electricity Expenses Account

Credit Ledger is :

  • Cash Account

Journal Entry

Journal Entry for Cash payment towards Electricity Expenses - Example
Ledger Posting

In Electricity Expenses Account.

Cash payment towards Electricity Expenses - Posting in Electricity Expenses Ledger Account - Example

In Cash Account

Cash payment towards Electricity Expenses - Posting in Cash Account - Example

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Location: Cuttack, Odisha, India

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