Accounts Payable Clearing

More information please Aliasger.....

Is it in debit or credit? What is the source of the entries? Give some examples of debit and credit narrations.

Depending on your software and financial procedures, this account could be a control account fort accounts payable, but it shouldn't keep on increasing.

It could also be a clearing account for unidentified charges from the accounts payable process, in which case it should be reconciled and all entries charged out to their appropriate accounts. A clearing account must end up with a zero balance.

A clearing account is used to record received inventory until it has been reconciled with the invoice.

Many accounting applications like Accpac Advantage series are batch processing applications. The Puchase order system can record the receipt of goods or services and charge the expense or Inventory Account and credit an "accounts payable clearing account". When the actual vendor invoices are posted in accounts payable an entry is generated and the "accounts clearing accounts is charged and AP is credited. If the clearing account is geting larger then the vendor invoices are probably not being posted. This may not be a problem because in many cases goods are received before the actual invoice.