Journal Entry for Expenses on Purchase of Goods Last Updated : 21 Apr, 2025 Comments Improve Suggest changes Like Article Like Report Purchasing process involves a number of steps starting from placing an order and ending with the delivery of goods. Apart from the cost incurred in purchasing the goods, any additional expenses like Carriage, Import Duty, etc is also paid. Any expenses incurred during the purchase of goods will be shown separately unlike an expenditure on assets.Journal Entry: Example 1: Goods purchased worth ₹10,000 and carriage paid ₹500 on it.Solution: Example 2: Goods purchased worth ₹50,000 and paid for import duty ₹1,250.Solution: Comment More infoAdvertise with us S sukantkumar Follow Improve Article Tags : Accountancy Commerce Similar Reads Journal Entry for Loss of Insured Goods/Assets Sometimes insured goods are lost by fire, theft, or any other reason. There can be three cases related to the loss of insured goods or assets.A. Claim does not get accepted by the Insurance Company: Journal Entry:  Example: Goods lost by fire ₹50,000. Insurance co. does not accept the claim.Assets l 1 min read Journal Entry for Loan Taken A business can take an amount of money as a loan from a bank or outsider. In return, the business has to pay interest. A. Loan is taken from a bank or person:Journal Entry:  Example: ₹10,000 was taken as a loan from the bank.Solution:  B. Interest charged by the bank or person and then paid: There c 1 min read Journal Entry for Loan Given Businesses can also provide loans to any person or entity.A. Loan is given to a person:Journal Entry:  Example: A loan of ₹5,000 has been provided to Dharmesh.Solution:  B. Interest charged and then received on loan given:There can be a situation where the interest is charged first and then received 1 min read Journal Entry for Outstanding Expenses Outstanding expenses are those expenses that are related to the same accounting period in which accounts are being made but are not yet paid.Journal Entry:  Example 1: Salaries due to employees ₹11,000.Solution: Example 2: Rent due to landlord ₹20,000.Solution: 1 min read Journal Entry for Prepaid Expenses Such expenses which are concerned with the next financial year but have been paid in the current year are called prepaid expenses. Prepaid expense journal entry is recorded by debiting the particular expense and crediting cash. Prepaid Expenses are also known as Unexpired or Advance Expenses. Prepai 2 min read Journal Entry for Accrued Income or Income Due An income that has been earned but not yet received in the current financial year is called Accrued Income. It is recorded with an adjusting entry to recognize the income earned during the accounting period. Accrued Income Journal Entry is recorded by debiting the Accrued Income A/c and crediting th 1 min read Journal Entry for Income Received in Advance or Unearned Income Sometimes, businesses receive money relating to the coming month or year which has not been earned yet. Such an income that has not been earned yet but has been received in advance is called Unearned Income. Unearned Income is considered to be a liability by the business. Ex- If the Commission for t 1 min read Journal Entry for Income Tax Income Tax is paid by the business on the profit earned during the year. Income Tax is a personal liability of the proprietor. The journal entry will be:A. Payment of Income Tax:Journal Entry:  B. Refund of Income Tax:Journal Entry:  Example: Income Tax paid ₹1,500.Refund of Income Tax received ₹500 1 min read Journal Entry for Life Insurance Premium & Employee's Life Insurance Premium 1. Life Insurance Premium:Sometimes, Life Insurance Premium is paid by the business on the behalf of the proprietor. Life Insurance Premium of the proprietor is considered to be a personal expense of the proprietor and hence is treated as Drawings by the business.Journal Entry:  Example: Life Insura 1 min read Journal Entry for Interest on Capital The proprietor can charge interest on the amount invested by him/her in the business as capital, which is shown as Interest on Capital. Interest on Capital Journal Entry recognizes the interest expense incurred by the partnership for using the partner's capital. Interest on Capital A/c (Expense) is 1 min read Like