Adjust Account Payable in QuickBooks in Journal Entry
Why and How to adjust accounts payable in QuickBooks with a journal entry? This is one of the most important questions which every QuickBooks user uses to ask. Accounts Payable is a short-term debt payment or you can say an obligation of a business that originates because of purchase made on credit,and it needs to be paid to avoid default.
Why it’s important to adjust accounts payable in QuickBooks with a journal entry?
The answer is so simple; the account payable method keeps track of the amount that you owed vendors and suppliers, and it recognizes expenses as they occur rather than when you pay them.
The balance in the liability account, Accounts Payable at the end of the year will carry forward to the next accounting year. To gather more information regarding account payable and journal entries you can give a watch to our website. In case of any queries related to this topic or any other topic of QuickBooks, you can contact us at (844)-888-4666.
The process to adjust accounts payable in QuickBooks with journal entry (Quick Fix way)
1. Firstly, Create an appropriate journal entry.
- Open your QuickBooks account,
- From the company menu, choose ‘Make General Journal Entries’.
- In the Make General Journal entry window, change the date and fill in the entry number if necessary.
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For vendors with underpayment
- Select the accounting field and choose Account payable from the drop-down list.
- Now enter the amount under the debit column, tab to the name column, and select the vendor name from the drop-down list.
- In the next line, select the offset account and enter the amount under the credit column.
- Now select save and close.
For vendors with overpayment
- Select the accounting field and choose Account payable from the drop-down list.
- Now enter the amount in the credit column, tab to the name column, and select the vendor name from the drop-down list.
- In the next line, select the offset account and enter the amount in the debit column.
2. Now apply the journal entry to the existing debit/credit
- Go to the vendor menu, select Pay Bills.
- When you have selected pay bills, then choose the Set Credits option.
- Now under the credits tab, select the available credit and select done.
- When everything is done, select Save and Close.
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Some of the most common and typical account payable journal entries are: -
- Inventory those are damaged or undesirable, returned to the supplier.
- Purchase of merchandise inventory on account.
- Entry when the payment is made to the creditor or the payable.
- Expenses incurred on the account.
Two journal entries related to accounting payable (Highlights)
Case1- Credit Purchase is recorded (At the time of recording an invoice)
Purchase A/C | Debit |
To Accounts Payable A/C | Credit |
Case2- The cash paid to the supplier is recorded in the books of account.
Accounts Payable A/C | Debit |
To Cash or Bank A/C | Credit |
Keynote: -
- Account payable is created when you buy goods on credit.
- It is shown under the current liabilities of the balance sheet.
End of the Line
The Account payable account can be made by anyone who buys goods and services on credit. If you want to read more about Account payable in QuickBooks, you can visit our website. In case of queries related to adjust accounts payable in QuickBooks with journal entries, you can contact us at (844)-888-4666
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