Accounts Payable Ledger

Accounts Payable Ledger Definition

Accounts Payable Ledger, also known as the creditor’s ledger, is the subsidiary ledger which lists down the details of the different suppliers or vendors of the company along with their account balances highlighting the outstanding amount payable by the company.

It tracks specific payable information for every invoice, including:

  • Invoice Date
  • Invoice Number
  • Name of Supplier/Vendor
  • Order Quantity
  • Amount Payable

The general ledger account balance for accounts payableAccounts PayableAccounts payable is the amount due by a business to its suppliers or vendors for the purchase of products or services. It is categorized as current liabilities on the balance sheet and must be satisfied within an accounting more is compared to the ending accounts payable ledger balance for ensuring that both accounts are matching. Such a comparison is made as part of the period-end (quarterly/yearly) closure process.

Example of Accounts Payable Ledger

Let us analyze the below example for more understanding:

The purchase transactions for Titan Sports Gear Company are:

The accounting transactions were recorded under the perpetual inventory method in the following accounts payable journals entriesAccounts Payable Journals EntriesAccounts Payable Journal Entries refers to the amount payable accounting entries to the creditors of the company for the purchase of goods or services and are reported under the head current liabilities on the balance sheet and this account debited whenever any payment is been more:

Purchase Journal

Merchandise Inventory A/C Dr……………………………………………$20,000

                Accounts Payable A/C……………………………………………………………$20,000

accounts payable ledger example 1.1

Cash Disbursement Journal

Cash Disbursement Journal example 1.2

General Journal

General Journal example 1.3

These journals would be further posted in the Accounts Payable as below:

accounts payable ledger example 1.4

Vendor Account: Mighty Sun Suppliers

The vendor/subsidiary ledgerSubsidiary LedgerA subsidiary Ledger is a list of individual accounts that bears a similar nature. It refers to an expansion of the conventional general ledger separately used to record all the transactions related to the accounts payable and accounts receivables in a detailed more would accordingly be updated for Might Sun Suppliers as:

Vendor Account example 1.5

As we can see from the above tables, the vendor balance for Mighty Sun Suppliers is $0 (NIL), and the accounts payable balance is also $0 (NIL). Since both of them are precisely matching, it is not essential to prepare an entire schedule of accounts payable. If any balance amount is pending, a separate schedule of accounts payable would be required to make. 

The treatment for Accounts Receivable would also be in a similar manner.

However, there needs to be some caution and consistency required to be maintained. This example is just for one supplier and one month. There could be multiple entries and multiple vendors for a firm. Hence, there should be a proper mechanism in place with no room for errors since reconciliation can be a difficult task.

Issues in Matching

The below are the ways through which the General LedgerGeneral LedgerA general ledger is a book of accounts that records the everyday business transactions in separate ledger accounts. The entries made in a ledger can be verified by getting a NIL balance on summing up all the ledger account amounts in the trial more control can get out of sync with the Accounts Payable:

  1. A manual entry has been made in one of the books, and no other record has been maintained. This will make reconciliation difficult.
  2. Posting to General Ledger (GL) from Accounts payable module may have been turned off at some point in time. This is especially in case of computerized recording of entries.
  3. A posting task may have been interrupted either due to human error or power failure during the job. A transaction log should be considered for out-of-balance entries. In case a complete batch is missing, the invoice history should be compared with the ledger.
  4. There is a possibility of all posting occurring successfully at the time of entry, but the file got damaged in the interim. As a prevention method, copies of the file should be stored in a physical or electronic format.

Advantages of Accounts Payable Ledger


The existence of Accounts Payable ledger is not mandatory but preferable for keeping the books of accounts clean and organized. Such ledgers help in keeping track of payments receivable and payable for multiple years. It is a critical tool during the audit process as well and can be successfully linked in case of investigating individual entries.

Chartered Accountants or individuals with a degree in commerce background can perform such tasks, which makes it easier for small offices and vendors to maintain such accounts.

This article has been a guide to Accounts Payable Ledger and its definition. Here we discuss how to prepare accounts payable ledger along with practical examples and explanations. You can learn more about accounting from following articles –

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