Posted by: logan August 3, 2020
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Accounts Payable is not an asset but liability which has credit balance. If we receive invoice mean our credit is gone up. Ordered Supplies as expenses ( non-inventory), Expenses are debited/ a debit balance.
Supplies (Expenses) Dr $500.m
Accounts Payable Cr $500.
(Supplies purchased on credit)
Accounts Payable Dr $500
Bank Account Cr. $500.
Bank has Debit balance and if we write a check it is going down and we credit it.
Still I am struggling on the entry suggested by Maxpayne and Investopia.
If you are right then what am I missing?
Supplies (Expenses) Dr $500.m
Accounts Payable Cr $500.
(Supplies purchased on credit)
When we process a/p and paid it has following impact and following effect on general ledger ( am i correct?)
Bank Account Cr. $500.
Bank has Debit balance and if we write a check it is going down and we credit it.
Still I am struggling on the entry suggested by Maxpayne and Investopia.
If you are right then what am I missing?
Last edited: 03-Aug-20 02:32 PM
Last edited: 03-Aug-20 03:10 PM