Which expense should not be included in the business journal?

Which expense should not be included in the business journal?

• A. July 24 Subcontractor payment - $650 by check #0002.
• B. July 7 equipment rental - $1,000 charged to credit card.
• C. July 17 Bicycle purchase for his son - $275.
• D. July 4 Advertising in Penny Saver - $450 by check #0001.

Answer: (C)

All entries in the business journal are transactions that affect the business’s finances and relate to running the business. Expenses recorded should be ordinary and necessary costs of operating the business, such as paying a subcontractor, renting equipment, or advertising. A bicycle purchase for the owner’s son is a personal item and does not pertain to business activities, so it does not belong in the business journal. If personal items are paid with business funds, the proper treatment would be to record it as an owner’s drawing or reimbursement, not as a business expense. The other items listed are clearly tied to business operations: subcontractor services, equipment rental for business use, and advertising to promote the business. Hence, the personal purchase should not be included in the business journal.

All entries in the business journal are transactions that affect the business’s finances and relate to running the business. Expenses recorded should be ordinary and necessary costs of operating the business, such as paying a subcontractor, renting equipment, or advertising. A bicycle purchase for the owner’s son is a personal item and does not pertain to business activities, so it does not belong in the business journal. If personal items are paid with business funds, the proper treatment would be to record it as an owner’s drawing or reimbursement, not as a business expense. The other items listed are clearly tied to business operations: subcontractor services, equipment rental for business use, and advertising to promote the business. Hence, the personal purchase should not be included in the business journal.