A Home Repair Company Paid $160 Cash For Gas And Oil Expenses On Its Van

The journal entry to record is to debit Gas and Oil Expenses Account, as these Expenses are incurred so these are increased, and credit Cash Account, as when the cash is paid, it is decreased because it is going out of the company’s business according to the rules of debit and credit. Gas and Oil expense paid during the accounting period is recorded in the Income Statement

Journal Entry:

                                                      Gas And Oil Expenses a/c  $160

 

                                                                                                      Cash a/c $160

                                     (Paid Gas And Oil Expenses For Cash During The Accounting Period)

If the company paid by check and deposited into the bank account, then we credit bank account instead of cash account.