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No, if you "PAID" $600 on a phone bill that is not an account payable, it's an expense. Accounts Payable is something you "OWE" but have not paid yet.
Most companies pay their "bills" such as phone, electrical, etc, as they get them and they are not recorded onto the books until they are paid, however, if the company so chooses and they wish to record the bill prior to payment, then an Account Payable would be used. For example. My company received a phone bill for $600 on October 1st, however we are not going to pay the bill until October 15th and I still want to record this on my books, the following entries would be made.
Phone Expense (debit) $600
Accounts Payable-Phone (credit) $600
Once the 15th arrives and I pay the bill, the following adjustments would have to be made.
Accounts Payable - Phone (debit) $600
Cash (credit) $600
If you paid "ahead" then it is listed as a "Prepaid Expense", a good example of this would be Rent paid 6 months in advance.
The Journal Transaction for this would reflect:
Prepaid Rent (debit) $$$$$
Cash (credit) $$$$$
As each month progressed, you would "adjust" the entries by doing the following:
Rent Expense (debit) $$$$$
Prepaid Rent (credit) $$$$$
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Are accounts payable accounts that you expect will be paid to you?
are accounts payable accounts that expect will be paid to u
What is the journal entry of telephone bill?
To record the telephone bill, the journal entry would be: Debit Telephone Expense (income statement account) for the amount of the bill, and Credit Accounts Payable (balance sheet liability account) for the same amount if the bill is to be paid later, or Credit Cash (balance sheet asset account) if the bill is paid immediately.
What is the journal entry of telephone bill is due to be paid?
debit telephone expensescredit expenses payable
Does a decrease in accounts payable increase cash flow?
Decrease in accounts payable causes the decrease in cash flow because decrease in accounts payable means that creditors are paid of and hence cash is decreased when somebody paid.
What type of account is bills payable account?
ALL payable accounts are liabilities no matter what they are for. Whether it is a bill payable, mortgage payable, note payable, wages payable, etc, they are all listed as a liability. This is because a "payable" is something you (your company) owes but has not paid yet. For a bill such as Phone, once the obligation is met it is no longer a liability but an expense.
What is difference between bill receivable and bill payable?
bill receivable is what is owed to a company; bill payable is what is paid
When an accounts payable account is paid in cash the owner's equity in the business decreases True or False?
False. Payment of an accounts payable reduces cash and reduces accounts payable. Equity is not affected.
What is the accounts payable cycle?
To checking the payable invoices and send it to the invoice verification and then send to for paid.
What are the two categories of accounts payable?
Accounts Payable or Notes Payable, which also fall under Current Liabilities (to be paid in one 12 months or less) and Long-Term Liabilities (paid in more than 12 months) Accounts Payable would fall under Current Notes Payable would fall under Long-Term
What is the normal account balance for the accounts payable ledger account?
1. As accounts payable is the liability of the company to be paid in future so in this way like all other liabilities accounts balance, accounts payable has also credit balance.
Is notes payable an asset or a liability?
Accounts Payable and Notes Payable are liabilities. Accounts receivable - assets All "payable" accounts are "liabilities". This is because a liability is something the company OWES, a payable is the very same thing, hence the term "payable". Though some payable accounts change from being a payable to an expense, they are still liabilities as long as they are "payable", these include: Interest Payable (liability until paid, then reverts to Interest Expense) Salary or Wages Payable(liability until paid, then reverts to salary or wage expense) Payable accounts maintain a "credit" balance, meaning they increase with a Credit and Decrease with a debit. Now the quick answer: Payable = Liability Receivable = Asset
Increase in accounts payable Statement of Cash Flows?
Increase in accounts payable means increase in cash as if cash was paid there was no increase in accounts payable but as no payment done it saves the cash and causes the increase in actual cash.
