Purchased Stationery JE is an expense.
Recording stationery expenses is simple.
How’s the JE output?
- Debit to the Stationery GL
- Credit to the Cash/Bank GL
There is an alternative treatment.
Credit GL can be different.
Credit can be either to
- Vendor Payable or
- Accounts Payable
Estimated Time to Read:
4 minutes
Accounting records all the financial transactions to reflect the accurate profit or loss of the business.
Said differently, Capital Investors primarily look for the business’s outcome, i.e., whether they can make some profits from the company.
If the profits exceed those of traditional investments, they will be more inclined to invest additional capital in the business.
Therefore, recording the transactions must be precise and include the background of the transaction.
Let’s break down each of the above aspects.
What does recording a transaction in a precise manner mean?
The Journal entry posted in the books of accounts shall be Specific to the GL accounts. If we consider the Stationery Purchase as an example, the GLs to be involved for entry shall be Stationery GL and Bank or Payable GL.
Instead of Recording Accounts Payable, adding more references to the GL Account helps improve the entry context.
For example, the purchase of Stationery is from ABC Stationery Traders. Then, it is more appropriate to record the entry with credit to ABC Stationery Vendor GL.
What does adding a background of the transaction mean?
We are following the concept of adding Narration and recording each journal entry in the books of accounts.
Let’s consider the same example of recording the Journal entry for Stationery Purchases. If the Purchase of Stationery is for the administration or Payroll departments, it requires a specific mention in the Narration.
If the purchase of stationery is for an entity’s new project, it should be capitalized. Without proper context, the entry being a debit to asset and credit to liability will result in unnecessary confusion.
Note: Nowadays, the term Narration has different names. For example, SAP requires adding details to the text field. So, the purpose of narration is the same irrespective of its other names in various accounting software.
Purchased Stationery Journal Entry:
A stationery Purchase journal Entry is similar to recording any other expenses incurred by an entity as part of its Ordinary Course of business. So, it is a debit to expenditure with a corresponding credit directly to the Bank Account or the Liability GL. Let’s see these entries in detail.
1) Purchased Stationery Journal Entry
Note: Generally, the GL Account description for recording Stationery transactions is Printing & Stationery GL. This is not a rule, but following the generic GL names is more appropriate.
2) Payment Entry
Examples of Stationery Purchase transactions:
Stationery Expenses include Printing, Postage, courier Charges, and Stationery for Office administration, such as books, files, folders, and pens.
Summary for Purchased Stationery Journal Entry:
Stationery Purchase is an expenditure Ledger and relates to a Nominal Account. So, the Journal entry is recorded by debiting the Stationery GL and crediting the Liability GL or Bank GL. There will not be any Tax element in these transactions. However, Sales tax (GST) is already part of the product’s price and need not be mentioned separately in the journal entry, as the purchasing entity will be the end consumer. I hope this entry clarified recording journal entries for stationery purchases.
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