Lesson 56: General Ledger (GL) - Payables (Creditors)
Just as the cash transaction of a business get recorded in the cash journals and the credit sales and returns get recorded in the debtor’s and debtor’s allowances journals, the credit purchases and returns must also be recorded in their own journals. The credit purchases are recorded in the Creditors’ Journal and the returns get recorded in the Creditors’ Allowances Journal.
These journals are very similar to the cash payments journal except that instead of a bank column, there is a creditors’ control column. This is because the purchases and returns do not involve cash but rather affect the liability (obligation) which is creditors’ control. ie. credit purchases increase the liability and the returns decrease the liability.
These journals are very similar to the cash payments journal except that instead of a bank column, there is a creditors’ control column. This is because the purchases and returns do not involve cash but rather affect the liability (obligation) which is creditors’ control. ie. credit purchases increase the liability and the returns decrease the liability.
Resources
- Student Workbook - Lesson 56 [251KB] - download