USA Writing Off AP Invoice

[OTUser]

If we're writing off a invoice in our liability account, is it appropriate to ask for a credit memo from the supplier? What is the accounting impact for write offs versus applying a credit memo? Thank you

 

[Larry Bailey]

If we're writing off a invoice in our liability account, is it appropriate to ask for a credit memo from the supplier? What is the accounting impact for write offs versus applying a credit memo? Thank you

If I understand the situation, you have recorded a bill from a vendor as a liability to be paid but, for whatever reason, you are not going to pay the bill. I am partial to JE's because they can explain what happened and why the bill is being voided. The JE would credit the account originally charged (expense or equipment or whatever) and debit the liability account to zero it out. You can then write the reason for the entry in the JE field.