Accounts payable ledger definition
/What is the Accounts Payable Ledger?
An accounts payable ledger contains the detail for all invoices received from suppliers. It is used as a subsidiary ledger, from which summary-level information is periodically posted to the general ledger. The general ledger account balance for accounts payable is compared to the ending accounts payable ledger balance to ensure that the two match; this comparison is done as part of the period-end closing process.
Contents of an Accounts Payable Ledger
The accounts payable ledger tracks the specific payable information for each invoice, which includes the following:
The invoice number. The invoice number is provided by the supplier, and uniquely identifies the invoice being sent.
The invoice date. It is essential to track the invoice date, which is used to calculate when the invoice should be paid.
The supplier name. The supplier name is usually recorded as a vendor code. This is needed to ensure that all invoices from a particular supplier are attributed to that specific suppliers, so that management can run reports on total billings by supplier.
The amount billed. The amount billed by the supplier must be recorded, to ensure that this is the amount paid to the supplier on the specified due date.
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Advantages of the Accounts Payable Ledger
Having a separate accounts payable ledger keeps a large amount of detailed payables transactions from cluttering up the general ledger. It is especially useful for larger organizations that process thousands of supplier invoices.