74 – Telephone

Operating Expenses

 

Synopsis

Account 74

Debits

Credits

  1. The telephone and cellular phone expenses paid for by the retailer.

  2. The intercom system expense.

  3. The month-end accrual of telephone expense.

  1. The collections for personal toll calls made by individuals.

  2. The reversal of the month-end accrual of telephone expense.

 

Remarks:

The estimated expenses for telephone should be accrued from the last billing cut-off date or from the previous month-end to the current month-end, whichever is applicable.

Proper controls should be established governing toll calls.  It is recommended that toll calls be verified and reviewed periodically.

Telephone expenses directly related to data processing equipment operation should be charged to Data Processing (Account 77).

Advertising in the yellow pages should be charged to the appropriate department’s advertising expense.