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.