Ask Experts Questions for FREE Help !
Ask
    slider_223's Avatar
    slider_223 Posts: 1, Reputation: 1
    New Member
     
    #1

    Aug 29, 2010, 12:33 PM
    What asset account do I increase if I increase accounts payable?
    Purchased $85 of advertising in this month's local paper on credit; cash payment due in a month.
    Just Looking's Avatar
    Just Looking Posts: 1,610, Reputation: 480
    Ultra Member
     
    #2

    Aug 29, 2010, 12:43 PM

    Assets are debit entries, but so are expenses. What do you think you should debit?
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
    Uber Member
     
    #3

    Sep 1, 2010, 01:46 PM

    I would like to clear up the false assumption that's in your subject title: What asset account do I increase if I increase accounts payable?

    That question doesn't work. New students get the idea that certain accounts always go together and that you're doing one thing because of what the other account is. In other words, increasing an accounts payable simply means you now owe more than you used to - but there is nothing in that which dictates what other account should be used. You could owe more money for any number of reasons.

    There's nothing about increasing accounts payable that says there's an asset at all. The two just aren't related.

    You've mentioned advertising in the post itself, but the title you wrote is telling me you're making the assumption about things being used just because accounts payable is being used, and that just doesn't exist.

    There's always at least two accounts for every entry. In your entry, the accounts payable has nothing to do with what other account is being used. You can just as easily have paid cash and the other account will remain the same. You have to learn to separate the statements in the transaction and find the parts that tell you what each account is.

    "Purchased $85 of advertising in this month's local paper" - this is what tells you what the other account is - the payable isn't related to it.
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
    Ultra Member
     
    #4

    Sep 1, 2010, 03:29 PM

    You will have an expense account and a liability account

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

I need to find out how to find the increase and decrease side for each account off [ 1 Answers ]

I need to know how to find the increase and decrease side for each account and what is the normal balance for each account off a financial statement.

What GL accounts are used for an addition to Rental Portfolio Fixed Asset account [ 1 Answers ]

I understand that a debit to the asset account would occur when adding an asset what is the GL account that is credited? Thank you

Land Account Increase [ 3 Answers ]

Belle Company buys land for $50,000 on 12/31/06. As of 3/31/07, the land has appreciated in value to $50,500. On 12/31/06, the land has an appraised value of $51,800 By what amount should the Land account be increased in 2007? I'm not asking for the answer to the question but I do not understand...

Will increase in pump intake pipe size, increase flow rate? [ 1 Answers ]

At my cabin I use a 12 volt Flojet pump to pump water from the lake to the cabin. I am using 1/2 inch plastic pipe for the intake and outlet on the pump. Would I see an increase in water flow if I increase the size of the pipe going from the lake to the pump to 3/4 plastic


View more questions Search