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Role of Supplier in Business? 

A supplier is a person, or an organization which is used to buy goods to do business. A supplier can be a middleman or a manufacturer. 

Supplier Invoice? 

Supplier invoice is one of the accounting vouchers which is used in business to transact business. Accounting is an equilibrium equation which hangs among debit, credit columns and rows. A buyer and a supplier are two parties always involve completing a cycle. 

How does a supplier record goods transfer to a buyer in accounting ledger? 

• Debit to Accounts Receivable $xxx.xx 
• Credit to Income Account $xxx.xx 

Notes: 

1. The Accounts Receivable is a current asset which is part of the balance sheet. 
2. Whereas income is part of the income statement. 

How does a buyer record goods received from a supplier in accounting ledger? 

• Debit to Purchases $xxx.xx 
• Credit to Accounts payable $xxx.xx 

Note: 

1. Purchase is part of the income statement under cost of goods sold. 
2. Whereas account payable is current liability which is part of the balance sheet. 

How does a supplier record cash in accounting ledger? 

• Debit to Bank/Cash in Hand $xxx.xx 
• Credit to Accounts Receivable $xxx.xx 

Notes: 

• Both bank and accounts receivable are part of the balance sheet.  

How does a receiver of goods record payment make to a supplier? 

• Debit to Accounts payable        $xxx.xx 
• Credit to Bank/Cash on Hand   $xxx.xx 
• Both accounts payable and bank/cash on hand are part of the balance sheet. 

Practice Questions: 

1. Login to www. lockinledger.com for practice questions. 
2. 100% free training program is available to learn Core Advanced Accounting.