Journal Entry To Clear Accounts Payable
T he jour nal entry to write off or clear or close or to remove Accounts Payab le / Creditors Account from t he b ooks of accou nts is recorded w he n we paid full amount to our suppliers / vendors or sundry creditors for goods purc hased o n credit or account. Now, actually, the company paid off (paid in full) its current liability. Following entry is recorded to clear accounts payab le: Accou nts Payab le a/c XXX Cash a/c / Ba nk a/c XXX (Write Off Accounts Payab le Duri ng T he Period) As the favora b le b ala nce of accounts payab le is credit, so to close it we de b it it a nd as we paid cas h or check / cheque to our suppliers, so we credit cash or b a nk account as it had decreased.