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  • May 11, 2012, 08:47 AM
    deli0561
    Accounts Payable
    What the credit and debit side of posting an accounts payable invoice?
  • May 11, 2012, 11:15 AM
    pready
    When you make the purchase on account with a vendor your debit will be to Purchases, Inventory, Supplies or other appropriate account and your credit will be to Accounts Payable. You are increasing an asset and you are increasing a liability.

    When you make a payment on an accounts Payable your debit will be to Accounts Payable and your credit will be to Cash because you are reducing your accounts payable balance and you are reducing cash.

    Note: Accounts Payable is a Liability because you owe a vendor money for a purchase you made with that vendor on account. Liabilities have a normal credit balance. Cash is an asset and has a normal debit balance.

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