Accounts Payable
(AP) Journal
Entries
(P2P)
@CORPORATEWALA
@CorporateWala @CorporateWala28 @CorporateWala @CorporateWala
Purchase of
Goods on Credit
Goods worth $1,200 are purchased on credit.
🖊 Journal Entry:
Inventory Dr. $1,200
Accounts Payable Cr. $1,200
@CORPORATEWALA
@CorporateWala @CorporateWala28 @CorporateWala @CorporateWala
Purchase of
Services on
Credit
IT services worth $600 are availed on credit.
🖊 Journal Entry:
IT Services Expense Dr. $600
Accounts Payable Cr. $600
@CORPORATEWALA
@CorporateWala @CorporateWala28 @CorporateWala @CorporateWala
Advance
Payment to
Vendor
$500 is paid in advance for future
purchases.
🖊 Journal Entry:
Advance to Vendor Dr. $500
Bank Account Cr. $500
@CORPORATEWALA
@CorporateWala @CorporateWala28 @CorporateWala @CorporateWala
Receipt of Goods
and Invoice
Goods worth $1,500 are received along with
an invoice.
🖊 Journal Entry:
Inventory Dr. $1,500
Accounts Payable Cr. $1,500
@CORPORATEWALA
@CorporateWala @CorporateWala28 @CorporateWala @CorporateWala
Full Payment to
Vendor
$1,000 is paid to settle an outstanding
invoice.
🖊 Journal Entry:
Accounts Payable Dr. $1,000
Bank Account Cr. $1,000
@CORPORATEWALA
@CorporateWala @CorporateWala28 @CorporateWala @CorporateWala
Partial Payment
to Vendor
$750 is paid towards a $1,500 invoice.
🖊 Journal Entry:
Accounts Payable Dr. $750
Bank Account Cr. $750
@CORPORATEWALA
@CorporateWala @CorporateWala28 @CorporateWala @CorporateWala
Early Payment
with Discount
An invoice of $2,000 is paid early, availing a
$100 discount.
🖊 Journal Entry:
Accounts Payable Dr. $2,000
Bank Account Cr. $1,900
Discount Received Cr. $100
@CORPORATEWALA
@CorporateWala @CorporateWala28 @CorporateWala @CorporateWala
Late Payment
Interest
$50 is charged as interest for late payment.
🖊 Journal Entry:
Interest Expense Dr. $50
Accounts Payable Cr. $50
@CORPORATEWALA
@CorporateWala @CorporateWala28 @CorporateWala @CorporateWala
Purchase Returns
Goods worth $300 are returned to the vendor.
🖊 Journal Entry:
Accounts Payable Dr. $300
Inventory Cr. $300
@CORPORATEWALA
@CorporateWala @CorporateWala28 @CorporateWala @CorporateWala
Tax Deducted at
Source (TDS) on
Vendor Payment
A payment of $2,000 is made, with $200 TDS
deducted.
🖊 Journal Entry:
Accounts Payable Dr. $2,000
Bank Account Cr. $1,800
TDS Payable Cr. $200
@CORPORATEWALA
@CorporateWala @CorporateWala28 @CorporateWala @CorporateWala
Freight Charges
on Credit
Freight charges of $100 are incurred on
credit.
🖊 Journal Entry:
Freight Expense Dr. $100
Accounts Payable Cr. $100
@CORPORATEWALA
@CorporateWala @CorporateWala28 @CorporateWala @CorporateWala
Accrued
Expenses
Rent expense of $400 is incurred but not yet
billed.
🖊 Journal Entry:
Rent Expense Dr. $400
Accrued Liabilities Cr. $400
@CORPORATEWALA
@CorporateWala @CorporateWala28 @CorporateWala @CorporateWala
Clearing Accrued
Liabilities
An invoice of $400 is received for the accrued
rent expense.
🖊 Journal Entry:
Accrued Liabilities Dr. $400
Accounts Payable Cr. $400
@CORPORATEWALA
@CorporateWala @CorporateWala28 @CorporateWala @CorporateWala
Reversal of
Unused Advance
$200 advance to a vendor is reversed due to
non-delivery.
🖊 Journal Entry:
Bank Account Dr. $200
Advance to Vendor Cr. $200
@CORPORATEWALA
@CorporateWala @CorporateWala28 @CorporateWala @CorporateWala
Exchange Rate
Variance
An invoice for €800 ($880) is settled at $900
due to currency fluctuation.
🖊 Journal Entry:
Accounts Payable Dr. $880
Foreign Exchange Loss Dr. $20
Bank Account Cr. $900
@CORPORATEWALA
@CorporateWala @CorporateWala28 @CorporateWala @CorporateWala
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