Journal Entry Distributions-Payments and Write Checks

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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

Note: 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.