Is Accounts Payable A Debit or A Credit or Both

You might also like

Download as txt, pdf, or txt
Download as txt, pdf, or txt
You are on page 1of 1

Is Accounts Payable a debit or a credit or both?

Definition of an Accounts Payable Credit


Since Accounts Payable is a liability account, it should have a credit balance. The
credit balance indicates the amount that a company or organization owes to its
suppliers or vendors.

If a company purchases additional goods or services on credit (as opposed to paying


with cash), the company will need to credit Accounts Payable so that the credit
balance will increase accordingly.

Definition of an Accounts Payable Debit


If a company pays one of its suppliers the amount that is included in Accounts
Payable, the company will need to debit Accounts Payable so that the credit balance
is decreased.

You might also like