![]() Understanding Accounts Payable: Is It A Debit Or A Credit? On a company's balance sheet, payables are recorded as a current liability. We can similarly Pass an entry, for any other type of office expense which is payable.Accounts payable (AP) are short-term obligations that a company owes to its creditors or suppliers, but company has not yet paid for them. Accordingly, ” office expenses payable ” account would be credited. When a liability is increased, the liability account is credited, as according to the Rules of Debit and Credit, an increase in liability account is credited. (We can replace the name of the ” office expenses” which such expense in the accounting entry).įurther , when such expenses incurred and the company does not pay the amount upfront to the provider of service, the company incurs a liability towards service providers, on account of amount payable, or in other words the liability of the company is increased. Since office expenses (like Rent, Maintenance, Stationery, Telephone or any other similar expenses) is an expense A/c, so, office expense A/c would be debited, because according to the Rules of Debit and Credit, an expense A/c is debited. What would be the Journal Entry for office expenses (these could be any expenses like Rent, Maintenance, Stationery, Telephone or any other similar expenses) 10,500 , where such expenses amounts to Rs. To Outstanding Interest on Short Term Loan A/c 10,000Īccounts Payable Journal Entry for Office expenses Accordingly, Outstanding Interest on Short Term Loan, which is an Account Payable would be credited. įurther, on Interest payable to lenders, the company incurs a liability towards lenders on account of amount payable, or in other words the liability of the company is increased. Since Interest payable to lenders is an expense, so, Interest A/c would be debited, because according to the Rules of Debit and Credit, an expense A/c is debited. What would be the Journal Entry for Interest on Loan, due on loan, where interest amounts to Rs. Accordingly, Wages Payable Account, which is an Account Payable would be credited.Īccounts Payable Journal Entry for Interest on Short term Loan įurther, on Wages payable to workers, the company incurs a liability towards workers on account of amount payable, or in other words the liability of the company is increased. Since Wages payable to workers is an expense, so, Wages A/c would be debited, because according to the Rules of Debit and Credit, an expense A/c is debited. What would be the Journal Entry for Wages payable to workers amounting to Rs. įurther, on Purchases of goods in Credit from ABC Co., the company incurs a liability towards ABC Co. or in other words the liability of the company is increased. Since Purchase of goods is an expense, so, Purchases A/c would be debited, because according to the Rules of Debit and Credit, an expense A/c is debited. What would be the Journal Entry for Purchase of goods amounting to Rs. Accounts Payable Journal Entry for Credit Purchases of goods
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