16 Nov New Inventory Parts
Accounts Payable – Special Considerations
Accounts Payable type accounts are treated much the same way as Accounts Receivable type accounts. Because Accounts Payable is a specific type of account, it will be segregated into a subtotal on the financial statements. From a presentation standpoint, if bills, credit, A/P aging reports, etc. will not be needed, it is preferred to have the Accounts Payable account created as another current liability. By doing so, it will be subtotaled on the financial statements with accounts such as accrued expenses, current portion of long term debt, other payables, and the like. If an account has already been set up as an Accounts Payable type, it is not possible to change it to another type. The best alternative is to create a new account, and mark the old one inactive to keep it from being used in the future. Keep in mind, however, that if a bill is created, the software will automatically make a new Accounts Payable type account to handle the entry. If bills and credits will be needed, there is not a way to get around having this type of account. It is also important for the change from Cash to Accrual statements.