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    MTowery's Avatar
    MTowery Posts: 1, Reputation: 1
    New Member
     
    #1

    Sep 3, 2018, 04:16 PM
    Journal Entry Worksheet to Trial Balance...
    The company paid $20,160 cash to settle the account payable created on April 3.

    I have to correctly write a journal entry for the above -
    (I wrote) 4/3 Account Payable for 20160 (under credit).
    I am told this is incorrect what am I missing.
    Should I be adding it to my cash as well?
    paraclete's Avatar
    paraclete Posts: 2,705, Reputation: 172
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    #2

    Sep 5, 2018, 06:17 PM
    The most important thing to grasp about accounting is it is a double entry system comprised of debit and credits in equal amount therefore the correct entry is debit account payable, that is; reducing the accounts payable balance, and credit cash; reducing the cash balance

    If you were to add it to cash you would be doing the wrong thing and whatever you wrote regarding accounts payable is meaningless

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