Telephone is one of most important mean of the present communication system. Maximum business matters are solved within no time through telephones. Every employee, business partners and all other related persons are connected to each other because of telephone facilities. These services are given by the government authorities as well as by private companies.

Keeping in view the benefits of the telephone services, the cost is not so much. Any way, the business firm has to pay the bills of telephones, fax and internet etc.  Any amount paid in respect of telephone expenses, internet expenses and fax expenses will be debited to telephone expenses account.

Accounting Treatment of Telephone Expenses

a) In case of payment made by cash or cheques:-

Type of voucher to be prepared:- Cash or Bank payment voucher

Entry to be made

Debit:-   Telephone Expenses Account

Credit:-  Cash Account


Bank Account

b) In case of unpaid bills

Type of voucher to be prepared:- Journal voucher

Entry to be made

Debit:- Telephone Expenses Account

Credit:- Expenses Payable Account


Outstanding Expenses Account


Service Provider’s  Personal Account

Treatment of Telephone Expenses Account in Final Accounts

Telephone expenses are indirect expenses. Therefore, these expenses are shown in expenses side of the profit and loss account. All unpaid bills are added to telephone expenses and shown in liabilities side of the balance sheet