Accounts Payable (AP) Journal Entries

 When you create a standard invoice (Non PO)

Item Expense                                     Dr

    To Liability A/c

    

                                         or

Internet Expense A/c                           Dr

         To Accounts Payable A/c

If you override the Journal Entry (JE)

Small Tools A/c                                   Dr

         To Accounts Payable A/c 

  

The Original Journal Entry (JE) 

Internet Expense A/c                         Dr   (Knocked off)

            To Accounts Payable 

Small Tools Expense A/c                   Dr 

             To Internet Expense                     (Knocked off)

And the final entry would be 

Internet Expense A/c                         Dr

           To Accounts Payable A/c

When you make a payment to Standard Invoice 

   Liability A/c                                     Dr

          To Cash Clearing A/c

Once we do Reconciliation for Reconciled Payment

Cash Clearing A/c                               Dr

        To Cash A/c

When we create Debit Memo (DM) against Standard Invoice 

Liability A/c                                          Dr

       To Item Expense A/c

When we create Credit Memo (CM) against Standard Invoice

Liability A/c                                          Dr

           To Item Expense A/c

When we apply Debit Memo (DM) against standard invoice and paid them

Liability A/c                                   Dr

       To Cash Clearing A/c

        To Liability A/c

When we apply Credit Memo (CM) against standard invoice and paid them

Liability A/c                                    Dr

      To Cash Clearing A/c

      To Liability A/c

Prepayment Entries

* When you validate the prepayment invoice the status of the invoice is "Unpaid".

* When you make the payment to prepayment invoice the status of invoice is "Available".

* If you don't check the checkbox called "Allow Prepayment Application" system will treat this prepayment as "permanent prepayment". When you validate this invoice the status is "Permanent Prepayment".

When you create prepayment invoice 

Prepaid Expense A/c                           Dr

         To Liability A/c     

When you make the payment to prepayment invoice 

 Liability a/c                                        Dr

     To Cash Clearing A/c

Bills Payable Entries

When you create an standard invoice by selecting the payment method as Bills Payable Payment Method.

Item Expense A/c                 Dr

          To Liability A/c

When you make the payment 

Accounts Payable A/c                       Dr

           To Bills Payable A/c

Run Bills Payable Process

Bills Payable A/c                                 Dr

            To Cash Clearing A/c

When you have done Reconciliation

Cash Clearing A/c                                Dr

            To Cash A/c