Qualification > Commerce
Accounting term definition
$tyli$h Executive:
--- Quote from: avin on March 11, 2011, 05:40:39 am ---Alpha, how about bill payment?
--- End quote ---
Of course bill payment is to creditors as well. Suppose you buy a computer for your business and are billed $700 (which can be paid in installments). The business selling computer is your creditor then.
Alpha:
Yes, Bills Payables are creditors too.
By that, both Bills Payables and Accounts Payables will enter your Statement of Financial Position. The difference will be in your Income Statement; Accounts Payables will be included in your calculation for Purchases (in the Trading Account), while Bills Payables will appear as an expense (in the Profit and Loss Account).
In a strictly accounting sense, Accounts Payables refer to your trading activities, and Bills Payables to your operating activities, i.e. all the selling, administrative, and financial expenses incurred to bring about that trade.
I hope it's clearer...
~Good Day :)
***exam***:
--- Quote from: ~Alpha on March 11, 2011, 09:19:02 am ---Yes, Bills Payables are creditors too.
By that, both Bills Payables and Accounts Payables will enter your Statement of Financial Position. The difference will be in your Income Statement; Accounts Payables will be included in your calculation for Purchases (in the Trading Account), while Bills Payables will appear as an expense (in the Profit and Loss Account).
In a strictly accounting sense, Accounts Payables refer to your trading activities, and Bills Payables to your operating activities, i.e. all the selling, administrative, and financial expenses incurred to bring about that trade.
I hope it's clearer...
~Good Day :)
--- End quote ---
good explanation alpha ! although i never knew they were two different things ! now i have a clear understanding :)
Alpha:
--- Quote from: ***exam*** on April 17, 2011, 09:34:23 pm ---good explanation alpha ! although i never knew they were two different things ! now i have a clear understanding :)
--- End quote ---
Np :)
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