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There are various operating and Non-operating expenses incurred by an organization in its ordinary course of business such as Salaries, Legal expenses, Electricity charges etc. Therefore, it is the primary responsibility of an accountant to record all these expenses in the books of accounts for deriving genuine net profit at the end of the accounting year.
Journal Entry for Electricity Bill paid
1. Traditional Accounting Approach
| Particulars | L.F. | Amount | Nature of Account | Accounting Rule |
| Electricity Bill a/c | Amt | Nominal | Debit- All expenses and Losses | |
| To Bank a/c | Amt | Personal | Credit- The Giver. |
(Being Electricity Bill paid)
2. Modern Accounting Approach
| Particulars | L.F. | Amount | Nature of Account | Accounting Rule |
| Electricity Bill a/c | Amt | Expense | Debit- The Increase in Expense. | |
| To Bank a/c | Amt | Asset | Credit- The Decrease in Asset. |
(Being paid electricity bill)
Example
On 12th March, Alex Ltd. paid an electricity bill amounting to 8,000 through cheque. Journalise the following transaction in the books of Alex Ltd.
In the Books of Alex Ltd.
| Date | Particulars | L.F. | Amount | Nature of Account | Accounting Rule |
| 12th March | Electricity Bill a/c | 8,000 | Expense | Debit- The Increase in Expense | |
| To Bank a/c | 8,000 | Asset | Credit- The Decrease in Asset. |
(Being paid electricity bill through cheque)