Internet Connection Expense & Accrued Journal Entry

Internet Connection Expense And Accrued Internet Connection Expense Journal Entry In Accounting

Internet connection, e.g., LAN (Local Area Network) WIFI, etc., means that the company uses internet facilities from internet service providing companies and pays a bill usually on every month.

Internet connection is an Expense for the company and it is recorded in Income Statement for the accounting period.

When the company paid for cash or bank, then we record the following entry as shown below:

                                  Internet Connection Expense a/c  XXX

 

                                                                                       Cash a/c / Bank a/c  XXX

                                                                     (Internet Connection Expense Paid)

 

Accrued Internet Connection Expense Journal Entry

When the company, which uses the internet facilities provided by internet service providing company, have not been paid internet connection bill for the month, then it creates a current liability for the company to pay to internet service providing company for the services used or benefits utilized during the accounting period.

The Adjusting Entry to record for accrued internet connection expense in the books of company is shown below:

                                   Internet Connection Expense a/c  XXX

 

                                                                                       Accrued Internet Connection Expense a/c  XXX

                                                               (Accrued Internet Connection Recorded for the Period)

Accrued Internet Connection Expense is also known as Internet Connection Expense Payable or Outstanding Internet Connection Expense and it is shown on the balance sheet as a current liability. It is shown on balance sheet as a current liability.

Accounting Heads For Internet Expense

Internet expense is categorized under different heads such as under Operating Expenses if it is the essential expense for the daily operations of the business such as the use of internet to send data of workers about working performance, sending documents to purchasing department through email during the work for ordering goods on time, etc.

If internet connection is used in office, then it is categorized under General & Administrative Expenses.