Accounts Payable Accounting — how are Accounts Payable recorded?

. 1 min read

As a liability account, accounts payable (AP) carry a credit balance. When these invoices are received from vendors, they should be recorded alongside an accompanying debit entry (to adhere to the standards of double-entry accounting).

For example, an invoice for information security consulting amounting to $1,000 would be recorded as a credit entry. When that AP is paid in full by the company, another account, such as cash, must be debited for the same amount ($1,000).

When reviewing transactions as part of the accounts payable workflow, the accounting team will typically scrutinize a number of key documents associated with each account, namely:

  • Receiving reports
  • Purchase orders
  • Vendor invoices
  • Contracts