Journal Entry Distributions-Payments and Write Checks
Payment transactions are posted to the General Ledger in the following manner:
Cash Disbursements Journal
|
Transaction |
Debits |
Credits |
|---|---|---|
|
Payment of invoice on account (Payments only) |
Accounts Payable* |
Cash |
|
Purchase discount applied to an invoice (Payments only) |
Cash |
Discount Taken Expense |
|
Cash purchase of an expense |
Purchase Expense |
Cash |
|
Prepayment (Payments only) |
Accounts Payable* |
Cash |
|
Apply prepayment to invoice (Payments only) |
Cash |
Accounts Payable* |
|
Cash purchase of non-stock, labor, or service items |
Salary and Wages Expense (or miscellaneous item expense) |
Cash |
|
Cash purchase of stock or assembly |
Inventory |
Cash |
*For companies using the cash-basis accounting method, Accounts Payable is replaced with <Cash Basis> and is not recorded in the General Ledger. Instead, expense (or inventory) and cash are recorded when the purchase is paid.