[elacap]

Here is the situation:

Our transaction is always like this:
Company A (our company) purchases materials to company S.
But at this time (Sept 2009), company S get our services to deliver materials to company L, which
A only get commission from S. The commission is $169.00.
The accountant posted the transaction to purchases and even paid it.
Company S paid the $169.00 on the same month to A and A recorded the payment as prepayment on receipts (we are using peachtree).
In payables, we have 169.00 overpayt and in sales, it shows -169.00.
How to make an adjusting entry on accounts payable to balance our record against record of S.

[morgaine300]

I'm thoroughly confused. First, you can't "purchase" materials "to" a company. You either purchase from the company or you sell it to the company. Which is it?

And you're getting a commission to delivery materials? Commissions are what you get for making a sale for someone else. Did you sell the materials for Company S?

Whose accountant recorded the commission as a purchase?

Why did A record the receipt from S as a prepayment. Has the sale/delivery not happened yet?

If said accountant made this entry for A, it sounds like that was a dr to purchases and cr to cash (you said paid it). And sounds like A made an entry that would have been a dr to cash and cr to a deferred revenue.

So how in all that did you end up with 169 in the payables and a negative balance in sales? And why was sales involved if it's a commission?

You need to be a lot clearer as to exactly what happened there. Saying it was "recorded as a prepayment" does not state what the entire entry was. We have to know exactly what all these entries were, and therefore where everything ended up. And whether it's really commission revenue or not, and whether you have actually earned it yet or not. Otherwise there is no way to know how to fix it.