Where does negative accounts payable come from

Um... I'm not sure. However, accounts payable is a liability meaning it is money that is going out of the company to that source. So accounts payable is always negative; no idea if that's what you meant by negative accounts payable but hopefully this helped if not post back and I'm sure someone that does know for sure will help ^_^.

Accounts payable is always negative as it is liability

It comes from posting checks in payment of bills, without posting the corresponding bill.

Sloppy accounting. Sloppy controls.
Overpayments, double payments, mispostings, etc.
This is also a big red flag for fraud.
Pre-payments should be in an asset account.
You should never issue funds on a vendor account unless a payable has been set up and approved.

Superfly999,

You are incorrect about this. Accounts payable is a positive number even though it is a liability

RE: [QUOTE=Superfly999;1240608]So accounts payable is always negative[QUOTE]

The thread is over a year old, cipy3.

Accounts payable is never a negative number because accounting does not use negative numbers. Accounts payable is a liability, a promise that you will pay off that account. When you pay that amount with cash, your cash account goes down for that amount. Accts payable is like a debt, nevertheless, it is not a negetive number.

The thread is still over a year old, just as it was 3 days ago when I said it the first time. It's doubtful any of these people are even around.

If Accts Payable is $500 and you pay $1000 to the person owed, does accts payable then become negative? ($500) or does the extra just go to accts receivable?

Please start a new thread for a new question. This thread is old and should have DIED by now.

There is a difference between ONE creditor's account, and "accounts payable" which consists of all of the creditor's accounts. Overpaying one creditor does not mean the "accounts payable" went negative.

As for that one creditor's account, it can be handled a couple of different ways depending on what you choose to do about the overpayment.

However, if this is for class you very likely will never see this happen as books are about perfect companies that don't make such errors. Because you won't see it for class, and in real life it depends on the situation, I'm not going to address that issue.

If there is something like this that someone has come across in real life and needs to know how to handle it, please start a new thread and ask your question with details of what happened.

If this is for class, I'd rather just kill this thread because it's doubtful you'll ever see it anyway. I think it was started because someone ended up with some negative balance, which was probably due to a MISTAKE in doing their homework.