Accounts Payable Entry

 Accounts payable represent amounts a company owes to its suppliers for goods or services purchased on credit. Here are the typical journal entries for accounts payable:

1. When recording a purchase on credit:

To record the purchase of goods or services:

• Debit the relevant expense or inventory account.
• Credit the accounts payable account.

Example (purchase of inventory on credit):

Date         Particulars                        Debit (₹)     Credit (₹)
------------------------------------------------------------------------
2024-06-06   Inventory/Expense A/c                       30,000
              To Accounts Payable A/c                           30,000
              (Being goods purchased on credit)

2. When making a payment to the supplier:

To record the payment to the supplier:

• Debit the accounts payable account.
• Credit the cash or bank account.

Example (payment made to supplier):

Date         Particulars                        Debit (₹)     Credit (₹)
------------------------------------------------------------------------
2024-06-15   Accounts Payable A/c               30,000
              To Bank A/c                                       30,000
              (Being payment made to supplier)

3. When there are discounts or adjustments:

To record a discount received from the supplier:

• Debit the accounts payable account.
• Credit the cash or bank account.
• Credit the discount received account.

Example (assuming a discount received):

Date         Particulars                        Debit (₹)     Credit (₹)
------------------------------------------------------------------------
2024-06-20   Accounts Payable A/c               30,000
              To Bank A/c                                       29,000
              To Discount Received A/c                            1,000
              (Being payment made to supplier with discount)

4. For GST Input Tax Credit (if applicable):

To record the GST on a credit purchase:

• Debit the relevant expense or inventory account.
• Debit the GST Input Tax Credit account.
• Credit the accounts payable account.

Example (purchase of inventory including GST):

Date         Particulars                        Debit (₹)     Credit (₹)
------------------------------------------------------------------------
2024-06-06   Inventory A/c                       27,000
              GST Input Tax Credit A/c            3,000
              To Accounts Payable A/c                           30,000
              (Being goods purchased on credit including GST)

These entries help maintain accurate records of liabilities and ensure proper tracking of amounts due to suppliers.