Accounts payable are amounts a company owed to its suppliers for goods and services purchased on credit. The payable amount shown on the company’s balance sheet as a current liability under sundry creditors.
Need to consider below points before making payment to vendor/supplier.
Wire transfer is electronic payment method to transfer funds from one bank account to another bank account through SWIFT.
Before making payment to invoice or bill, the following details should be considered.
Consigner is the owner of the goods and who take responsibility to deliver the goods to the consignee.
Consignee is the party who receives the goods and not owner of the goods. Most of the cases consignee is the buyer of the goods.
Purchase A/c Dr – 50,000
CGST A/c Dr – 4,500
SGST A/c Dr – 4,500
To Vendor A/c – 59,000
The 3 way match will help to avoid paying incorrect payments.
Trade discount is reduction from whole goods value, example it is given by the manufacturer to the retailer based on volume of purchases of goods like, 30% or 40% discount.
As per the terms and conditions mentioned in the purchase order supplier allow discount to buyer when payment made by the buyer before the due date.
Example, ABC company sold Rs.20,000 worth of goods to X company and payment terms are 30 days from the date of invoice. ABC company allowed 5% discount to X company, if payment is made within 10 days from the date of invoice.
Current liabilities are liabilities to the company that may expect to pay within one year from the reporting date. These current liabilities will appear on the company’s balance sheet. The following are the some examples of current liabilities.
Short term loans
Income tax payable
Payroll tax payable
Other accrued expenses
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