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Accounts Payable
Sometimes referred to as trade payables, accounts payable is an account sub-ledger that records all the amounts that a company or a person owes to suppliers but has not paid yet.
3,095 Questions
Account Payable is a major part of Accounti g cycle that pertains to obligations arising from the promise to pay later on in connection with the purchases and or services rendered, and in more technical sense, the A/P is a measure of time for making cash outflows into cash inflows.
How often is a worksheet prepared in accounting?
In accounting, a worksheet is typically prepared at the end of an accounting period, such as monthly, quarterly, or annually, depending on the organization's reporting needs. It serves as a tool to organize and adjust financial data before finalizing the financial statements. Some businesses may also prepare worksheets for specific projects or during audits. Overall, the frequency can vary based on the complexity of the accounting system and the requirements of management or regulatory bodies.
What are Petty cash fund used for?
Petty cash fund is usually used in a business to make minor odd purchases, such as a sheet of postal stamps, an inkjet cassette, a pack of envelopes, etc.
What are the data attributes for accounts payable?
Data attributes for accounts payable typically include vendor information (name, contact details, and payment terms), invoice details (invoice number, date, amount, and due date), payment status (pending, paid, or overdue), and transaction history (dates of transactions and amounts paid). Additional attributes may encompass department codes, purchase order references, and relevant tax information. These attributes help organizations manage their liabilities, track expenses, and ensure timely payments.
IN Basic they would be costs of interest charged on business loans, costs of banking, costs of purchasing a loan. Banks will charge to arrange a business a loan.
Does Amount Due -0.03 on a statement mean that they owe you 3 cents?
Let's use the example of an electric bill. Let's say you owed a month's electric bill of $329.47 cents. However, you like to work with even numbers or cents. So you pay $329.50. This would show as a "credit" to you of -0.03 means they are holding 3 cents in your favor. If you had paid $330.50 (on 329.47) to make a even more "even" payment, you'd be owed $1.03 (written on the statement as -1.03). But on the same statement, which serves as your next bill, you also owe a new bill of $360.28 cents. If you want everything to be even---so they owe you nothing and you owe nothing---you would pay $360.25 which would make a zero balance owed/due on both sides, at least until your next bill arrives.
Do you know... If you end services from a company and will not use them again anytime soon, and you have a 3-cent credit (meaning in your favor), the company must send you a check for that tiny 3-cents. They don't get to keep an overpayment (e.g. a credit owed to you). If, however, you continue to use the company, just let that credit fold into your next payment, so the balance due and balance now become zero.
Are bank fees classified as liabilities?
Anything that takes money out of your pocket is considered a liability.
Are unearned revenues earned but not yet billed?
No, Unearned Revenue is revenue that the person/company has received from the customer but has not yet fulfilled the commitment that they are obligated to fulfill. A better example.
Let's say you are a computer company and your customer orders a $1500 computer. The customer pays you for the computer but you haven't shipped the computer to the customer yet. The $1500 you received from the customer is unearned revenue. Unearned revenue is recorded as a liability until the obligation owed by your company has been fulfilled. This is because, even though your company has received the money for the order they have not fulfilled it and are liable to the customer to either fulfill the order as promised or if unable to do that, refund the customers money.
The entries above would be something like....
Cash Debit $1500
Unearned Revenue Credit $1500
Once the order is fulfilled and the customer has been shipped the computer and adjusting entry would then be made to reflect that the revenue has been earned something like:
Unearned Revenue Debit $1500
Revenue Credit $1500
This basically just moves the amount from the unearned revenue account to show that it has been earned. Cash had already been received so no adjusting entries would be required to the cash account.
Revenues earned but not yet billed would be an account receivable. If the customer gets the computer and hasn't paid for it yet, you've earned the revenue that would come from the computer but you haven't received the money yet. At this point the customer owes you (the company) and accounts receivable is debited with the amount owed.
A payment of a portion of an accounts payable will?
Decrease Cash (credit) and Decrease Account Payable (debit).
This is if you're paying cash which of course is the common way to pay an account payable. An account payable is what you owe another person or company, by paying even a portion of the account it will decrease your liability (what you owe) as well as decreasing your amount of cash on hand.
If the AP account balance has increased on the trial balance that means?
A/P increase on a trial balance means what
Should i pay a packing slip that shows a shortage?
You should not pay a packing slip that shows a shortage unless it has been resolved or agreed upon with the supplier. It's important to verify the shortage with your inventory and communicate with the supplier to understand the reason for the discrepancy. If the shortage is legitimate and acknowledged, you may need to adjust the payment accordingly. Always keep documentation of any agreements or communications regarding the issue.
When does debit balance in account payable?
As accounts payable has a credit balance as normal balance so it has credit balance until not paid but it may have debit balance as well in case when payment is made for more than actual accounts payable which create negative balance or debit balance.
What is the current ratio if cash is 8000 accounts payable is 2000 and stocks worth 2000?
Current ratio = current assets / current liability
Current ratio = 10000 / 2000
current ratio = 500%
How many entries are necessary for one transaction?
There is always two entries at minimum. Remember the accounting equation...
Assets = Liabilities + Owners Equity (Stockholders Equity)
For every action that must be an equal and opposite reaction. Simply put for every Debit there must be an equal Credit. So there has to be at least two entries, one debit and one credit.
