Kế toán, kiểm toán - Chapter twenty: The accounts payable ledger

CHAPTER TWENTYTHE ACCOUNTS PAYABLE LEDGER1. Post to the Accounts Payable ledger.2. Prepare a schedule of Accounts Payable.3. Record transactions involving notes payable.THE ACCOUNTS PAYABLE LEDGERObjectives:3The Accounts Payable LedgerBusinesses use special ledgers like the Accounts Payable ledger to be more efficient in their financial operation.Separate accounts are used for each creditor. 4The Accounts Payable Ledger (continued)All accounts for creditors can be placed in the Accounts Payable ledger.Accounts Payable ledgers are known as subsidiary ledgers. 5Posting To the Accounts Payable LedgerEntries should be posted to the Accounts Payable ledger on a daily basis.Up-to-date information is critical for the operation of a business.6Posting to the Accounts Payable Ledger (continued)When the ledger is set up, the name, address, and terms for each creditor are recorded on a separate ledger card.7Posting to the Accounts Payable Ledger (continued)Each transaction listed in the purchases journal is posted individually to a creditor’s account in the Accounts Payable ledger.8Posting to the Accounts Payable Ledger (continued)If a creditor’s account already has a balance when a purchase is posted, the amount of the purchase must be added to the previous balance.9Posting to the Accounts Payable Ledger (continued)Each transaction listed in the Accounts Payable Debit column of the cash payments journal is posted individually to a creditor’s account in the Accounts Payable ledger.10Posting to the Accounts Payable Ledger (continued)Each time Accounts Payable is debited or credited in the General Journal, the entry is posted individually to a creditor’s account in the Accounts Payable Ledger.11Proving the Accounts Payable LedgerAt the end of the month, the Accounts Payable ledger must be proved. To do this, a schedule of Accounts Payable is prepared.12Proving the Accounts Payable Ledger (continued)The name and account balance for each creditor with an unpaid balance are listed on the schedule form.The balances are added to find the total amount owed to all creditors.13Proving the Accounts Payable Ledger (continued)The total of the Schedule of Accounts Payable is compared with the balance of the Accounts Payable account in the General Ledger. The two accounts must be the same.14Proving the Accounts Payable Ledger (continued)Even though the totals agree, there may still be an error, such as posting the correct amount to the wrong creditor’s account.15Proving the Accounts Payable Ledger (continued)The Accounts Payable account in the General Ledger is known as the control account because it summarizes the balances of the subsidiary ledger.16Notes PayableSometimes businesses may need an extension to pay the balance owed. Once a firm date for payment has been established, a promissory note is issued, indicating the pertinent information.17Notes Payable (Continued)To account for the change Accounts Payable is debited and Notes Payable is credited. 18Accounting TerminologyAccounts Payable ledgerInterest expenseNotes payableSchedule of accounts payable19Chapter SummaryThe Accounts Payable ledger is a subsidiary ledger that contains individual accounts for all creditors.Transactions involving creditors are posted to the Accounts Payable ledger from the Purchases Journal, the Cash Payments Journal, and the General Journal.20Chapter Summary (continued)At the end of each month, the Accounts Payable ledger is proved. The Accounts Payable account in the General Ledger account is a control account. 21Chapter Summary (continued)Promissory notes given by a business are a liability and are known as notes payable.22 Investigating on the InternetAs a research assignment, access the oracle web site and report the sources of information that might concern Accounts Payable.231. The Accounts Payable control account does not provide a total for the amount owed by credit creditors.2. There is no need to prove the Accounts Payable ledger monthly. 3. Information found in the schedule of Accounts Payable by age is needed for paperwork sent to the IRS.Topic QuizAnswer the following true/false questions:FALSEFALSEFALSE24(Return to Topic Quiz)1. The Accounts Payable control account does not provide a total for the amount owed by credit creditors.FALSEIt DOES provide a total of the amount owed by credit creditors.25(Return to Topic Quiz)2. There is no need to prove the Accounts Payable ledger monthly. FALSEThe Accounts Payable ledger must be proven monthly.26(Return to Topic Quiz)3. Information found in the schedule of Accounts Payable by age is needed for paperwork sent to the IRS.FALSEIt is not needed by the IRS. It is needed by the management to make financial decisions.27