The creditors journal

The purpose of the creditors journal is to record all transactions where the business obtains goods or services on credit. The business receives goods or services now, but will pay in the future. As the business now owes money it means a liability creditors control is created. Liabilities increase on the credit side, hence creditors control should be credited. As many accounts could be debited, a collective name such as sundry purchases are used as the contra entry. The accounts debited should add up to all credit purchases and other than trading stock could include equipment, maintenance, etc. Each of these accounts have as contra entry creditors control. The posting to creditors control takes place at month end whereas all sundry accounts on date of transaction and total columns also at month end.

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