Miscellaneous expense definition
/What is Miscellaneous Expense?
Miscellaneous expense is a general ledger account that may contain a large number of minor transactions. These transactions are for amounts so small that they are not worth categorizing in a separate account. If any of these expenses increase in size in later periods, they may then be tracked within a separate account.
Miscellaneous Expense Best Practices
In a growing business, there may be a number of small expense items that gradually increase in size. A reasonable accounting practice is to initially record these expenses in a miscellaneous expense account, and then monitor the contents of this account over time. If any items within the account increase in size, then you can create a separate account for them. Similarly, some expenses may shrink over time, in which case the accounts in which they are stored can be eliminated, and these expenses shifted into the miscellaneous expense account.
Presentation of Miscellaneous Expense
A line item with the miscellaneous expense designation is commonly used in the income statement, and aggregates the amounts of several minor expense accounts. If this aggregate line item were not used, the income statement would contain so many line items that it would not fit within a single page. A sample presentation of an income statement that includes a miscellaneous expense line item appears in the following exhibit.
