Question

a) What general ledger account is credited when bills are entered using Quickbooks?

b) Which account is debited when a transaction is processed using the Pay Bills window in QuickBooks?

c) Which account is credited when a transaction is processed using the Pay Bills window in QuickBooks?

Note: An explanation would be greatly appreciated. When providing the solutions can you please be specific by answering question a) for example with something like (blank) account is credited and (blank) account is debited/credited for parts b) and c) please. Thank you very much for the help in advance by the way, I greatly appreciate it.

Answer 1

a) When a bill is entered in QuickBooks, it records a journal entry that will:

Debit the Expense Account and Credit the Accounts Payable Account

Answer for b) and c) are related as one is asking for the debit entry and the other is asking for credit entry.

Paybills window is used to pay bills that are already entered. The journal entry for this transaction is:

Vendor Account/ Creditor Account Dr   

To Bank Account/ Cash Account

So, the answer for b) is Vendor Account/ Creditor Account

and the answer for c) is Bank Account/ Cash Account