Accounts Payable Clearing

Hi,

I am working with an accounting software and I see that there is an
account, Accounts payable clearing, that keeps on increasing, and have
no clue what it represents...will appreciate anyone with some input
about that account...

Thanks,

Aliasger

 

More information please Aliasger.....

Is it in debit or credit? What is the source of the entries? Give some
examples of debit and credit narrations.

Depending on your software and financial procedures, this account could be a
control account fort accounts payable, but it shouldn't keep on increasing.

It could also be a clearing account for unidentified charges from the
accounts payable process, in which case it should be reconciled and all
entries charged out to their appropriate accounts. A clearing account must
end up with a zero balance.

--
Ken Russell


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A clearing account is used to record received inventory until it has
been reconciled with the invoice.

 

Many accounting applications like Accpac Advantage series are batch
processing applications. The Puchase order system can record the receipt of
goods or services and charge the expense or Inventory Account and credit an
"accounts payable clearing account". When the actual vendor invoices are
posted in accounts payable an entry is generated and the "accounts clearing
accounts is charged and AP is credited. If the clearing account is geting
larger then the vendor invoices are probably not being posted. This may not
be a problem because in many cases goods are received before the actual
invoice.

 

it's used for many purposes to adjust some entries with your Accounts receivables or if you have more than Organization you can charge to this account and then make inter-company entries to move the expense to another org , also if you need to move invoice from account to another you will use this account as clearing