Accounts payable journal entries are simple mechanically and the timing inside them is where the judgement lives. There are four a small business genuinely uses: recording an invoice, paying it, recording a credit note, and accruing for goods received but not yet invoiced. Each is two lines. What decides whether they are right is not the debits and credits but which period they land in, and that is a question about when goods or services were received rather than about when paperwork arrived. This page is the four, with the timing question in each stated plainly. It is a description of ordinary practice, not accounting advice for your business.
Recording an invoice, and paying it
Recording increases the expense or asset and increases payables. Paying reduces payables and reduces cash. The first entry's timing is the one that matters: it belongs in the period the goods or services were received, whenever the invoice happened to arrive.
The credit note, and why netting is wrong
A credit note reduces payables and reverses the original expense. It must be recorded as an entry rather than netted off against an invoice by hand, or the subsidiary ledger and the control account will disagree and the reconciliation will find it later at greater cost.
The accrual for goods received not invoiced
The entry that is most often missed and most often found by an auditor. What was received before the cut-off belongs in the period whether or not an invoice exists, estimated from the order and the receipt. On the worked example on this site, $48,000 current, $21,000 at thirty days, $9,500 at sixty and $4,200 beyond is $82,700 owed, 42% of it overdue, with days payable outstanding of 30.26.
Questions people ask about accounts payable journal entry
Should accruals be reversed?
Commonly they are reversed at the start of the next period so the invoice, when it arrives, posts normally. Whether that suits your process is a question for your own accountants.
What if the invoice differs from the accrual?
The difference posts to the period the invoice lands in, unless it is large enough to matter to the prior period, which is a materiality judgement rather than a rule.
Is this accounting advice?
No. It describes ordinary practice. How your transactions should be recognised and in what period is a question for your own accountants.