0
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
What does Terms - Net mean on an invoice?
I understand that "Net 30" means "due in 30 days" (Net15 & Net60 mean due in 15 or 60 days, respectively, etc), but sometimes invoices simply say "NET" with no number.
In my accounting classes (25 years or so ago) I was taught that "NET" means "NET 30", so I have always assumed this to be the case. Recently a vendor demanded payment for an invoice with "NET" terms that was less about 2 weeks old. He contended that "NET" means "due immediately"
Who's right?
What a petty cash book voucher?
a petty cashbook voucher is a source document given by the petty cashier to the receiver of the money as a proof of payment.
What is sundry debtor and sundry creditor?
If we provide some services to the vendors they are paying for our services therefore the person who are paying us becomes our sundry debtors.
Why does a record keeper prepare a trial balance?
A record keeper at the time of preparing trial balance balances(n totals) all the ledger a/c and transfer the balancing figure to the respective dr. and cr. columns of trail balance.
In this way he finds the accuracy as the totals of dr. and cr. columns are equal and if not then some error exists in recording or posting entries
What composes of current liabilities?
A liability shall be classified current when:
- The entity expects to settle the liability within the entity's operating cycle.
- The entity holds the liability primarily for the purpose of trading.
- Liability due to be settled must be within twelve months after the reporting period.
- The entity does not have the conditional right to defer settlement for at least twelve months after reporting period.
Reference: 2014 Edition, Financial Accounting Volume two
When a purchase on account is made does the invoice becomes a debit or credit memo?
A debit to the vendor's subsidiary account.
Is interest income is debit or credit?
Interest income would be a credit entry, as it increases a form of revenue. If the interest income is received in cash, the entry would be:
Dr Cash
Cr Interest income
If the income was not yet received but will be at a later date, the entry would be:
Dr Interest receivable
Cr Interest income
In either case, the Interest income account would be credited.
Is note receivable is a credit or debit?
A note receivable would be set up when a company lends money to another entity with the promise to pay back the amount at a later date (and normally to make scheduled interest payments).
Since this account is an asset account, setting it up would be a Debit entry to the account. The entry would be:
Debit Notes receivable
Credit Cash
This represents an increase to notes receivable (an asset account), and a decrease to cash (also asset) reflecting the outflow of cash to the entity that is borrowing the funds.
What is the difference between Sundry debtors And Sundry Creditors?
Sundry Debtors are from whom we have to take money and to sundry creditors we owe money.
What account type is accounts payable?
Accounts payable is a liability account. When something is purchased on account it falls under this category such as purchasing $10,000 worth of office supplies on account. You would debit the office supplies account under assets and credit accounts payable under liabilities.
Were do put long term notes payable on the balance sheet?
Long term = non current
Payable = liability
Therefore, I would put it under the Non-Current Liabilities heading in the balance sheet.
