At the end of the year, Accounts Payable create a summary of outstanding obligations that a company owes to its suppliers and creditors. This information is crucial for financial reporting, as it contributes to the balance sheet under current liabilities. Additionally, it helps in assessing cash flow and financial health, as well as aids in budgeting and planning for the upcoming fiscal period. Accurate accounts payable records ensure compliance with accounting standards and facilitate timely payments.
In answer to your question: no. Accounts Payable is the total amount you owe to your creditors, therefore it is a liability and should be left on your balance sheet.
Accounts payable's normal entry is credit. when it is at the debit side it could mean: reversal of accounts payable which happens at the end of accounting period, or return of merchandise purchased, or overstatement of purchased merchandise.
Just like normal people don't have just one bill, companies don't have one bill. For that reason, having just one "Account Payable" account for all their bill can be confusing, inefficient, and can lead to fraud. So, they establish what is called a "sub-ledger", in this case it's "accounts payable ledger". That account will have multiple accounts payable accounts and the end balance is shown in the general ledger as just "Accounts Payable". For Ex. there could be one for Insurance, office supplies, salary, and other accounts payable, etc.
At Year End usually there is a balance sheet item called "Trade Creditors" or something similar, this should be documented with a complete list of outstanding invoices with payment due to you.
At the end of the fiscal year, permanent accounts, also known as real accounts, are not closed to the Income Summary. These accounts include assets, liabilities, and equity accounts, such as cash, accounts receivable, accounts payable, and retained earnings. Instead, they carry their balances forward into the next accounting period. In contrast, temporary accounts like revenues and expenses are closed to the Income Summary to prepare for the new fiscal year.
Yes.
In answer to your question: no. Accounts Payable is the total amount you owe to your creditors, therefore it is a liability and should be left on your balance sheet.
Accounts payable's normal entry is credit. when it is at the debit side it could mean: reversal of accounts payable which happens at the end of accounting period, or return of merchandise purchased, or overstatement of purchased merchandise.
Just like normal people don't have just one bill, companies don't have one bill. For that reason, having just one "Account Payable" account for all their bill can be confusing, inefficient, and can lead to fraud. So, they establish what is called a "sub-ledger", in this case it's "accounts payable ledger". That account will have multiple accounts payable accounts and the end balance is shown in the general ledger as just "Accounts Payable". For Ex. there could be one for Insurance, office supplies, salary, and other accounts payable, etc.
At Year End usually there is a balance sheet item called "Trade Creditors" or something similar, this should be documented with a complete list of outstanding invoices with payment due to you.
At the end of the fiscal year, permanent accounts, also known as real accounts, are not closed to the Income Summary. These accounts include assets, liabilities, and equity accounts, such as cash, accounts receivable, accounts payable, and retained earnings. Instead, they carry their balances forward into the next accounting period. In contrast, temporary accounts like revenues and expenses are closed to the Income Summary to prepare for the new fiscal year.
wages expense and wages payable
Any account on the balance sheet is a permanent account - 'Cash', 'Accounts Receivable', 'Accounts Payable'. Income and expense accounts are temporary accounts because they are closed at the end of an accounting period. Examples are: 'Service Revenue', 'Office Expense', and, my personal favourite, 'Meetings and Entertainment Expense'.
Salaries expense is not a permanent account because it will ultimately be closed to retained earning account at the end of fiscal year and from new year salaries expense account start with nill balance.
All income and expenditure accounts are closed at Year End. and the balance is is shown on the Balance Sheet at Year end.
Accounts Payable are supported by invoices or billing statements. Accrued Expenses are expenses which relate to the current period; however, there is not an invoice on hand. For example, the company lawyer bills the company for his services on an invoice on the 15th of each month, you would post his invoice in Accounts Payable and accrue legal fees for the 16th to the end of the month.
Generally NO, wages are an expense. The only exception to the rule is if a company has "wages payable" which is wages that they owe but have not yet paid, "wages payable" is a liability until they are paid. Once paid, the account is closed into wage expense and is listed under the asset column of the Trial Balance sheet, until the end of the accounting cycle when expense accounts are closed out for the year end.