Miscellaneous Expense Journal Entry
In accounting, the miscellaneous expense is a type of small amount expense that does not occur regularly and does not fit in other categories of expenses. Likewise, the company usually only makes the miscellaneous expense journal entry at the last resort when the expense does not fit in other categories of expenses and its amount is relatively small.
Miscellaneous expense journal entry
The company can make the miscellaneous expense journal entry by debiting the miscellaneous expenses account and crediting the cash account.
Miscellaneous expense is an expense account, in which its normal balance is on the debit side. Likewise, after this journal entry, the total expenses on the income statement will increase while the total assets on the balance sheet will decrease by the same amount.
Miscellaneous expense example
For example, on the bank statement of May, the company ABC shows that the bank charges $30 for the safety deposit box it has rented during the month.
As the company ABC does not have regular transaction of bank service charges, it can make the journal entry for the $30 fee charged in the miscellaneous expenses account as below:
After this journal entry, total expenses on the income statement will increase by $30 while the total assets on the balance sheet will decrease by $30.
It is useful to note that the company should not always record any expense that is small into the miscellaneous expenses account. Those expenses that are small but occur regularly in the business operation should have their own accounts and be recorded into them instead of using miscellaneous expenses account.
For instance, in the example above, if the company has the regular transaction of the bank service charges, it should have an account that is named “bank service charges” and record that $30 into it.