This Is An Excel Assignment I Have Attached The Template At

This Is An Excel Assignmenti Have Attached The Template At The Botto

This is an accounting assignment focused on creating and managing an Accounts Payable subsidiary ledger. The task involves recording specific purchase transactions, returns, and payments with designated vendors, and ensuring that all entries are properly journalized, posted, and reconciled with the general ledger. Additionally, the assignment requires generating a Schedule of Accounts Payable, verifying that its total matches the general ledger balances.

Paper For Above instruction

In accounting, the accuracy and organization of accounts payable (AP) are crucial for maintaining healthy supplier relationships and ensuring accurate financial reporting. The subsidiary ledger for accounts payable provides detailed information about individual vendor balances, supporting the accuracy of the general ledger control account. This paper discusses the creation and management of an accounts payable subsidiary ledger based on specific transactions and the importance of proper journalizing, posting, and reconciling these records.

The assignment begins with the recognition of existing vendor accounts and their balances, which set the foundation for recording new transactions. Two vendors, Elite Computing and Simon’s Supply, are involved, each with specific addresses, credit terms, and starting balances. These initial balances must be accurately incorporated into the subsidiary ledger, which will be updated regularly as transactions occur. The transactions for January involve purchases, freight charges, returns, and invoice payments, which need to be properly journalized and posted to ensure accurate tracking of the outstanding balances with each vendor.

Transaction Recording and Journalizing

Proper journal entries are fundamental to the accuracy of financial records. For purchases made on credit, the typical journal entry involves debiting the inventory or supplies account and crediting accounts payable. Freight charges are usually added to the purchase cost if they are related to the acquisition of inventory, as per the company's accounting policies. When returns occur, they are recorded as credits to Accounts Payable, reducing the vendor balance. It is essential to record each transaction promptly, in the correct journal, and to post these entries immediately, concordant with sound accounting practices.

For example, on January 8, a purchase of merchandise from Elite Computing for $5,000 is recorded by debiting inventory and crediting accounts payable with the corresponding vendor account number. Freight charges added on January 11, involving Simon’s Supply, should also be included in the total payable amount. For the return on January 26, the credit memo reduces the accounts payable balance, and thus, the subsidiary ledger is decreased appropriately.

Posting to the Subsidiary Ledger

Following each journal entry, the detailed subsidiary ledger must be updated to reflect the new balances for each vendor. Each vendor’s account should include the invoice date, invoice number, purchase amount, freight (if applicable), returns, credits, and the current outstanding balance. This ongoing updating ensures transparency and ease of reconciliation with the general ledger at month-end.

Closing the Month and Preparing the Schedule of Accounts Payable

At the end of January, the subsidiary ledger balances for each vendor should be totaled and compared to the accounts payable balance reflected in the general ledger. The totals should match, confirming the accuracy of postings and calculations. Any discrepancies must be investigated and resolved. The Schedule of Accounts Payable serves as a detailed statement listing amounts owed to each vendor, supporting the accuracy and completeness of the financial records.

Importance of Reconciliation and Internal Controls

Reconciliation of the subsidiary ledger with the general ledger is an essential internal control procedure. It helps detect errors, prevent fraud, and ensure the financial statements' integrity. Regular posting, timely recording, and meticulous review of vendor accounts are part of best practices in accounting management and control.

Conclusion

Managing accounts payable through a detailed subsidiary ledger enhances the company's ability to monitor outstanding debts, improve cash flow management, and maintain good supplier relationships. Accurate journalizing, diligent posting, and regular reconciliation are fundamental elements for successful accounts payable management. This assignment exemplifies these principles through practical application, reinforcing essential accounting practices that support organizational financial health.

References

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• Heising, R. M. (2018). Accounting Principles, Volume 1 (12th ed.). South-Western College Publishing.
• Principles of Accounting, University of Phoenix. (2021). Textbook.
• American Institute of Certified Public Accountants (AICPA). (2022). Generally Accepted Accounting Principles (GAAP).
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