JE-110 Feb 2026Manualposted
Enter the approved bill.
| Account | Dimensions | Debit | Credit |
|---|---|---|---|
| 6800 Contractor expense | 6,250 US Dollar | ||
| 2000 Accounts payable | 6,250 US Dollar | ||
| Totals | 6,250 US Dollar | 6,250 US Dollar | |
Balanced.
Journal entry for accounts payable
When an approved vendor bill is entered, debit the expense or asset it bought and credit Accounts payable. When it is paid, debit Accounts payable and credit Cash.
- Bill
- $6,250
- Due
- March 12, 2026
- Entity
- Illustrative company
- Basis
- Accrual
- Currency
- USD
- Period
- February – March 2026
The worked example
On February 10, 2026 the company receives and approves a $6,250 bill from a law firm for February's work on Net 30 terms, and pays it on the due date, March 12, 2026.
Transaction · February 10, 2026
Transaction · March 12, 2026
JE-212 Mar 2026Manualposted
Pay the bill in the payment run.
Journal entry JE-2, 2 lines Account Dimensions Debit Credit 2000 Accounts payable 6,250 US Dollar 1000 Cash 6,250 US Dollar Totals 6,250 US Dollar 6,250 US Dollar Balanced.
What the entries do to the accounts
Every entry above posted to the ledger, starting from zero balances: the net debit or credit each account is left with. Debits equal credits, so the books still balance.
| Account | Debit | Credit |
|---|---|---|
| 1000 Cash | 6,250 US Dollar | |
| 6800 Contractor expense | 6,250 US Dollar | |
| Totals | 6,250 US Dollar | 6,250 US Dollar |
One account nets to zero across the entries and is not shown.
Why it is booked this way
Entering the bill recognizes the cost and the obligation together, in the month the service was received. Paying it later is a balance-sheet movement only: one liability and one asset go down by the same amount.
Keeping the two events separate is what gives an AP aging — the list of what is owed and when it falls due.
Common mistakes
- Booking bills only when they are paid, so the balance sheet never shows what is owed.
- Paying the same bill twice because it arrived by email and by post — a duplicate check before payment catches it.
Questions
- Is accounts payable a liability?
- A current liability: amounts owed to vendors for goods and services received, normally due within 30 to 60 days.
- Which date decides the month?
- The bill date decides the period the cost belongs to, provided the goods or services were received then. Payment only clears the liability.
Terms on this page
Work with this entry
The tool that computes the schedule, the concept behind it, the entries that come next and the components that render them.
- Duplicate paymentsSame vendor, same amount, close in time — plus the same reference whatever the date. Put your own figures in and get the schedule behind this entry.Tool
- Accounts payable, explained for foundersAccounts payable is approved vendor bills not yet paid. Booking them on arrival puts each cost in the right month and shows what cash is spoken for.Doc
- Debit vs creditA debit is an entry on the left side of an account and a credit is an entry on the right; neither means increase or decrease on its own — a debit increases assets and expenses and decreases liabilities, equity and revenue, and a credit does the opposite.Compare
- Accounts payable vs accounts receivableAccounts payable is money the company owes to its suppliers; accounts receivable is money its customers owe it — a liability on one side of the balance sheet and an asset on the other.Compare
- Accrued expenses vs accounts payableAccrued expenses are costs incurred that no bill has arrived for yet; accounts payable are bills received and approved but not yet paid — both are liabilities, separated by whether the vendor's invoice exists.Compare
- Journal vs general ledgerThe journal records each transaction in date order as a complete entry; the general ledger regroups the same lines by account, so each account shows its running balance.Compare
- Two-way match vs three-way matchA two-way match checks a vendor invoice against its purchase order; a three-way match adds the goods receipt, so the company pays only for what it ordered and actually received.Compare
- Journal entry for an inventory purchaseWhen inventory is bought on credit under a perpetual system, debit Inventory and credit Accounts payable. If an early-payment discount is taken, debit Accounts payable for the full bill, credit Cash for what is paid and credit Inventory for the discount.Entry
- Journal entry for accrued expensesAt month-end, debit the expense and credit Accrued expenses for work received but not yet billed. Reverse the accrual on the first day of the next month, then book the vendor's bill as usual when it arrives.Entry
- Journal entry for credit card expensesFor each company card charge, debit the expense it paid for and credit Credit card payable. When the statement is paid, debit Credit card payable and credit Cash.Entry
- ThreeWayMatchLine-level variances, not header totals.Component
- ApprovalInboxMobile-first, document inline.Component
An illustrative company, not anyone’s real books. Every figure on this page is computed from the inputs in the example and posted by the same functions as the journal entry balancer. General information for US companies under US GAAP, not accounting or tax advice.