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    deli0561's Avatar
    deli0561 Posts: 4, Reputation: 1
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    #1

    May 11, 2012, 08:47 AM
    Accounts Payable
    What the credit and debit side of posting an accounts payable invoice?
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    May 11, 2012, 11:15 AM
    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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