Inspection Fee Accounting Entry

What Is Inspection Fee In Accounting

Inspection fee is paid to certified inspector for inspecting or checking, assessing and evaluating the goods or services and a process in order to control the activities of the organization.

Inspection Fee Is What Type Of Account

For the company paying inspection fee it is an expense and the company receiving it, it is a revenue for its business.

Inspection fee is a Temporary Account which is closed to Income Summary Account at the end of the accounting period. It is shown on Income Statement for the period. As it does not have a balance in its T Account i.e., it is not a Permanent Account, so it is not recorded in the Balance Sheet or Statement of Financial Position.

Like other Expenses, the normal or usual / positive balance of inspection fee is debit and in case of closing entry it is credited which is unfavorable or negative balance for it. If inspection fee is an income, then its normal balance on credit side but negative balance on debit side.

Inspection fee paid by cash or through check is possible in accounting.

The Journal Entry to record is shown below:

                                Inspection Fees a/c  XXX

 

                                                                Cash a/c / Bank a/c  XXX

 

                                        (Inspection Fees Paid For Cash Or By Cheque / Check)