Accounts Payable: debit or credit?
Accounts Payable increases on the credit side and decreases on the debit side: its normal balance is a credit.
Liabilities are amounts the business owes. They increase with a credit.
Name in each convention
Account names and codes follow each convention; an account that does not exist in a convention is not offered there.
| Convention | Account |
|---|---|
| United States (US textbooks) | Accounts Payable |
| Spain (PGC 2007) | 400 Proveedores |
| France (PCG 2025) | 401 Fournisseurs |
| Germany (generic accounts) | Verbindlichkeiten aus Lieferungen und Leistungen |
Practice entries that use this account
- Buying two lines of merchandise on account
- Buying merchandise, paying part in cash and the rest on account
- Paying a supplier’s invoice in full
- Returning part of a purchase on account
- Paying a supplier within the discount period
- Buying office supplies on account
- Buying merchandise with a trade discount
- Buying merchandise on account
- Returning merchandise bought on account
- Buying merchandise under the periodic inventory system
- Paying part of a supplier’s invoice by bank transfer
- Buying a computer server on account
- Buying equipment with sales tax, part paid and part on account
- Adding a refrigeration unit to a van, on account
- Receiving the electric bill
- Paying the electric bill
- Bank charges on a wire transfer to a supplier
- Receiving a telephone bill to pay later
- Giving a supplier a note for an open account
- Purchase discount taken, reducing inventory
- Buying on account, returning part, paying the rest