Scribd
Upload
360 views4 pages

Accounts Payable Journal Entries

This document outlines journal entries for various accounts payable activities, including purchases of raw materials, traded goods, consumables, packing materials, and import purchases. For each type of purchase, entries are provided to record the receipt of goods by debiting inventory and crediting a clearing account, and to record invoice verification by debiting the clearing account and crediting the vendor. Additional entries may be made for freight and price differences. Purchase returns are handled by debiting the clearing account and crediting inventory.

Uploaded by

Heamanth Kkumar Chiittibomma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
360 views4 pages

Accounts Payable Journal Entries

This document outlines journal entries for various accounts payable activities, including purchases of raw materials, traded goods, consumables, packing materials, and import purchases. For each type of purchase, entries are provided to record the receipt of goods by debiting inventory and crediting a clearing account, and to record invoice verification by debiting the clearing account and crediting the vendor. Additional entries may be made for freight and price differences. Purchase returns are handled by debiting the clearing account and crediting inventory.

Uploaded by

Heamanth Kkumar Chiittibomma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

Accounts Payable Journal Entries

PURCHASE RELATED ACTIVITIES


Accounting entries get generated at the time of GR/IR, and
invoice verification.
At the time of GR/IR, the following entry gets generated.
Inventory a/c...Dr. xxx
To GR/IR a/c..xxx
On doing the Invoice verification, the following entry gets
generated and the liability is booked.
GR/IR a/c..Dr. xxx
To Vendor a/cxxx
At the time of invoice verification if there are differences between
GR value and IR and if stock is not available the difference
amount would go to price differences A/c.
1) PURCHASE RAW MATERIAL
At the time of Goods Receipt the following entry gets generated
(Ex. with notional figures).
For a P.O of Rs. 100(Basic 70 + Freight 10 ) (when freight is
borne by the company)
Inventory (Raw-material) a/c.Dr 80
To GR/IR Clearing a/c.70
To Freight clearing a/c10
On doing the Invoice Verification, the following entry gets
generated.
GR/IR Clearing a/c....Dr. 70

Freight Clearing a/cDr. 10


To Vendor a/c .70
To Vendor a/c.10
2) PURCHASE TRADED GOODS
In case of traded goods, the entries would be as below:
On receipt of the goods
Inventory (Traded) a/c..Dr. xxx
To GR/IR Clearing a/c.xxx
On doing the Invoice Verification, the following entry is generated.
GR/IR Clearing a/cDr. xxx
To Vendor a/c..xxx
3) PURCHASE CONSUMABLES
In case of Consumables, the entries would be as below:
On receipt of the Consumables
Inventory (Consumables) a/c..Dr. xxx
To GR/IR Clearing a/c.xxx
On doing the Invoice Verification, the following entry is generated.
GR/IR Clearing a/cDr. xxx
To Vendor a/c..xxx
4) PURCHASE PACKING MATERIAL
In case of Packing Material, the entries would be as below:
On receipt of the Packing Material

Inventory (Packing Material) a/c..Dr. xxx


To GR/IR Clearing a/c.xxx
On doing the Invoice Verification, the following entry is generated.
GR/IR Clearing a/cDr. xxx
To Vendor a/c..xxx
5) IMPORT PURCHASES
In case of Import Purchases, the process remains the same but
for the additional charges, which are included in the cost of
inventory.
The same is processed in MM module.
The following accounting entry gets generated on receipt of
goods.
Inventory a/c..Dr. xxx
To GR/IR Clearing a/c..xxx
To Freight Clearing..xxx
On doing the Invoice Verification, the following entry gets
generated.
GR/IR Clearing a/cDr. xxx
Freight Clearing a/c.Dr. xxx
To Vendor a/cxxx
To C&F Vendor.xxx
6) PURCHASE RETURNS
The transactions related to purchase returns are processed in
MM.

The entries that get generated on processing such transactions


are:
GR/IR a/c..Dr. xxx
To Inventory a/c.xxx

You might also like