All expenses relating to commercial books, magazines and newspapers, purchased for official purpose are booked under books and periodical expenses account.  One point must be noted in mind that the purpose of purchasing of the books or magazines or newspaper must be totally related to business only. For example these books and magazines and the newspapers are purchased by a business firm for the following purposes:-

  1. To increase the  knowledge of products or services.
  2. To have the inquiry in respect of the suppliers,  customers and business competitors.
  3. To understand the legal issues of the business firms.
  4. To keep up-to-date with the current affairs.
  5. For official visitors.

Accounting treatment of Books and Periodicals Expenses:- For all expenses incurred in respect of books etc., the Books and Periodical Expenses account should be debited and cash or bank or supplier’s account should be credited according to the nature of transaction.

a) Books and Periodical expenses incurred in cash:-

Type of voucher to be prepared:- Cash Payment Voucher

Entry to be made:-

Debit:  Books & Periodical Expenses Account

Credit:– Cash Account

b) Books and Periodical expenses paid by cheque:-

Type of voucher to be prepared:- Bank Payment Voucher

Entry to be made:-

Debit:  Books & Periodical Expenses Account

Credit:- Bank  Account

c) Books and Periodical purchased on credit:-

Type of voucher to be prepared:- Journal Voucher

Entry to be made:-

Debit:- Books & Periodical Expenses Account

Credit:- Supplier’s  Account

d) For outstanding expenses in respect of books and periodicals expenses:-

Type of voucher to be prepared:- Journal Voucher

Entry to be made:-

Debit:  Books & Periodical Expenses Account

Credit:- Outstanding Expenses  Account

Treatment of Books and Periodicals Expenses Account in Final Accounts

The Books and Periodical Expenses are indirect expenses. That is why these expenses are to be shown in expenses side of Profit and Loss Account.

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