Accounts Payable

Accounts Payable Internal Controls

Internal controls for accounts payable are used to reduce the risk of fraud and error in the accounts payable process. The purpose of the internal controls is to ensure that only valid supplier invoices are paid.

Last modified January 17th, 2017 by Team
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Supplier Statement Reconciliation

A supplier reconciliation sometimes referred to a vendor reconciliation is used to ensure that all supplier invoices, credit notes, and payments have been recorded correctly in the accounts payable ledger.

Last modified December 12th, 2016 by Team
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Accounts Payable Control Account

The accounts payable control account is an account in the general ledger which maintains summary postings relating to accounts payables. The account, which is sometimes referred to as the purchases ledger control account, is used to allow the detail of supplier transactions to be kept in a separate subsidiary personal account ledger which is not part of the double entry bookkeeping system.

Last modified February 5th, 2019 by Team
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Received Utilities Bill

A utilities bill will be recorded as an expense to the business. As the business is given credit by the supplier, the other side of the accounting equation is a liability to the supplier (accounts payable).

Last modified December 5th, 2018 by Team
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Purchase Services on Account

Purchasing services on account will be recorded as an expense to the business. As the services are purchased on account, the other side of the accounting equation is a liability to the supplier (accounts payable).

Last modified October 10th, 2018 by Team
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Cash Discount Received

A business has been invoiced 500 for goods and takes a 2% cash settlement discount for early payment.

The original invoice would have been posted to accounts payable, so the balance before settlement on the suppliers account is 500. A 2% discount on 500 is 10, and the amount of cash the customer pays is therefore 490.

Last modified July 21st, 2018 by Team
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Purchase Office Supplies on Account

Purchasing office supplies on account will be recorded as a current asset (supplies on hand). As the supplies are purchased on account, the other side of the accounting equation is a liability to the supplier (accounts payable).

Last modified July 2nd, 2018 by Team
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Accounts Payable Payment

When goods are purchased on credit from a supplier the amount owing to the supplier is recorded as an accounts payable. When a payment is made to the supplier for the amount outstanding the payment of the liability is recorded using an accounts payable payment journal entry.

As an example suppose a payment of 3,000 is made to a supplier using cash.

Last modified November 6th, 2016 by Team
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Supplier Invoice Payment Terms

When goods or services are purchased on account from a vendor, the invoice will stipulate the vendor invoice payment terms. These payment terms indicate when an invoice is to be paid.

For example, an invoice might stipulate payment terms net 90 or net 390 terms, which means that the full amount of the invoice is due for payment 90 days from the date of the invoice.

Last modified November 6th, 2016 by Team
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Accounts Payable Journal Entries

The accounts payable journal entries below act as a quick reference, and set out the most commonly encountered situations when dealing with the double entry posting of accounts payable.

In each case the journal entries show the debit and credit account together with a brief narrative.

Last modified July 16th, 2018 by Team
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Aged Accounts Payable Report

The aged accounts payable report is a listing of outstanding balances by supplier, analyzed into difference age classifications based on the number of days a vendor invoice is overdue for payment.

Last modified November 6th, 2016 by Team
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