Definition: Purchase Returns or return outwards can be seen as a process where goods are returned to the supplier because of being defected or damaged. Therefore, the supplier has to receive those goods back and make the subsequent entry in their accounts and ledgers to ensure that they can maximize the overall returns. In the […]
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Definition: A purchase discount reduces the purchase price of certain inventories, fixed assets supplies, or any goods or products if the buying party can settle the amount in a given time period. The purchase discount is also referred to as cash discounts. This is mainly an incentive to the purchasing party to settle the bill
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Introduction: Trade creditors or payables or accounts payable are the outstanding balances to be paid to the creditors or other company parties for different services or products at purchase on credit. Accounts payables are the credit nature class shown under the current liabilities section of the statement of financial position. Accounts payables cannot be written
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Definition: Salary payable is the amount of liability or payment of the company towards its employees against the services provided by them but not yet paid at the end of the month, year, or for a specific period. These amounts include the basic salary, overtime, bonus, and Other allowance. These payables are required to recognize
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Most people feel confused in answering whether an account payable is a current or long-term liability. The answer to this question is that there are two types of liabilities that appear on the company’s balance sheet, one is current and the other is long-term. Account payable comes under current liability as this is the amount
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Current Liability: Current liabilities are a company’s short-term debts payable or due within a year or one operation cycle/period. Current liabilities are shown in the balance sheet above long-term liabilities or non-current liabilities. Current liabilities are typically paid off using current assets like cash or cash equivalents. A business must have enough current assets to
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Definition: In order to understand the accounting for interest payable, we first need to understand what Interest Expense is. Interest expense is the cost of using monitory facilities or consuming financial benefits for some time that offer by a financial institution or similar institution. When this interest expense has been created, in return for consuming
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Three ways matching is the control that put in the accounting department especially in payment function to ovoid overpayment to suppliers. That is the main purpose of this internal control function. There are three main documents and functions involved. First is the purchase order, second is the invoice, and the last one is goods received
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Overview: Account Payable Management is one of the most important roles of the management team in the company, especially executive management in the finance section. Controlling cash payment is as important as controlling cash collection. Generally, the controlling of these sections is done by the expertise of the executive person in finance sections that gain
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Definition: Accounts payable are the liabilities that the companies owe to their suppliers as the result of purchasing goods or rendering the services on credits. For example, the company should record accounts payable as the result of purchasing USD1,000 in credits for a personal computer for staff. Accounts payable are types of current liabilities which
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