 what did we receive auto service now we might be thinking well auto could be an asset but this is the service which is probably an expense it's something that we have consumed we see auto expense here so we're going to post it to the auto expense auto expenses like all expenses have debit balances represented by the fact that they do not have brackets we need to make it go up because expenses only go up they only go one way how do we make something go up we do the same thing to it which in this case would be another debit so i'm going to copy the auto expense copy auto expense and we're going to paste that on top in c11 right click and paste it one two three so how much did uh are we going to pay we're going to pay the 320 with the auto expense then we're going to credit the same amount of 320 credit 320 and the only question is what are we going to credit we already touched on it we're going to credit accounts payable now does it make sense that we credit accounts payable well accounts payable is a credit balance account because it's a liability and we need the bad thing to go up because we owe more money how do we make something go up we do the same thing to it which in this case would be a credit so yep we're going to credit that account i'm going to copy that i'm going to put that on the bottom because credits just traditionally go on the bottom in cells c12 right clicking and pasting one two three so there's our transaction we're going to post that to three locations first location being the trial balance so here's auto expense here's auto expense on the trial balance here's what we're going to post the auto expense on the trial balance in cell i15 so within i15 we're going to say equals pointing to the auto expense of 320 in d11 what's going to happen the 600 is going to go up in the debit direction put us back out of balance and net income will go down so the expense goes up net income goes down remember net income is revenue of a credit minus the debits the credits are winning by 308 680 now we're going to post the other side to accounts payable so here's accounts payable here's accounts payable on the trial balance there's something in it even though it's zero what's in it e6 plus d8 we don't want to delete that we're going to double click on that go to the end of it so that we can see the activity within here and then say plus and point to that uh 320 which will make the accounts payable go up to 320 and put us back in balance the reason we want those formulas is that we can then easily see by double clicking uh what is in there we can also use these formulas up here to see what is in there those formulas are located in the formula tab under the formula auditing so these are the items here i like to put them up here and i'm going to get rid of that all right so now we're going to post this to the subsidiary ledger why because the common question with accounts payable will be how much money do we owe people well the trial balance says we owe people 320 who do we owe and when do we owe them well for that information we're going to need a subsidiary ledger breaking it out by vendor so we're going to go over here i'm now it didn't tell us in the question but i'm assuming the vendor must be this one related to auto a auto over here so that's where we're going to post it so i'm going to post it in the credit side to this particular vendor in m16 saying that this equals and then point to that 320 bringing the balance up from zero by 320 to 320 like so now all of our vendors of course add up to that 320 which ties out to the uh trial balance now we're also going to record that to the general ledger so the general ledger remember every account has a general ledger account it's in order just by date and we are just going to record the general ledger account for the accounts payable only just to compare and contrast the gl account for accounts payable and the new account that we need just for accounts payable being the subsidiary account for accounts payable so we're going to post that same information over here in the credit side equals in u11 equals the 320 bringing the balance back from zero up to 320 so now the general ledger adds the 320 the subsidiary ledger adds the 320 the accounts payable trial balance adds to 320 and we can look at the next transaction which is on 215 business meal at outback on account to be paid in the future all right so we had a business meal and again we bought it on account so is cash affected no we bought it on account we're going to pay it in the future therefore we have an io the io account when we owe someone else money is called accounts payable but again it's a it's a liability account we might want to think about what we got in this case we got uh meals so meals and entertainment that's going to be a type of expense down here so we can say that's in the expense area all expenses have debit balances they only go up therefore we're going to debit the uh expense account of entertainment expense in this case so i'm going to copy that we're going to put that on top because the meals generally go on top or debit generally yeah debits generally go on top so we're going to paste that one two three up here and the amount will be then for 640 so if we debit something 640 we are also going to credit something 640 we will represent credits with a negative 640 and that will put brackets around it for this problem we're going to hit enter in a format set for us then we just need to know what this account should be that we will be crediting and we already said that that will be accounts payable does it make sense that we would credit accounts payable well accounts payable has uh credit in it we need to make it go up because we owe more money therefore we need to do the same thing to it has what it is it's a credit uh so crediting would be the same thing to it and that will make it go up that for so it makes sense that we credit accounts payable so i'm going to copy that g 10 we're going to copy that we're going to put our cursor in c 15 right click and paste one two three now let's post this to our three locations first location being trial balance so we're going to be down here in i 16 so we are in i 16 at the moment equals and we're going to point to the 640 for the meals and entertainment and once we hit enter what's going to happen it's going to go up by 640 put us out of balance and net income will go down so there we have that then we're going to post the accounts payable to the trial balance here's accounts payable here's accounts payable here's what we want to post it there's something in there what's in there e 6 plus d 8 plus e 12 so i want to double click on it not delete it go to the end of it and then select plus and point to the accounts payable note that we're never going to put a negative sign in here we're just going to say equals and or pluses all the negative signs are going to be represented here so then we're going to select enter and it goes up to 960 puts us out of balance and of course if you get confused on that then you know you will see that if we go the wrong way by the fact that will be out of balance if it goes the wrong way so now we're back in balance we're going to post that same information to the subsidiary ledger why because really the accounts payable usually the questions that will be asked how much do we owe people we owe people 960 saying that's we can see that on the trial balance well who do we owe and when do we owe it well for that we're going to need a subsidiary ledger in order by vendor so we got the subsidiary ledger by vendor we're going to go out back over here in q9 so we're in q9 we're going to select equals and point to that 640 credit in this case bringing this balance up to 640 and now the total adds up to 960 being the 320 to a auto and 642 out back there's the 960 which matches what is now on the trial balance once again we're also going to post this to the general ledger so every account has a general ledger the general ledger is going to be in order by date and therefore we're going to post this same information over here in cell u12 equals and we're going to point to that 640 so there we have that remember every account has a general ledger we're only looking at the general ledger for the accounts payable account so we can compare it to the new activity being the subsidiary ledger we can see that the general ledger by date adds up to 960 the subsidiary ledger by vendor adds up to 960 and the trial balance adds up to 960 all right last thing and then we have to stop here so we're going to go to 315 says we pay it out back for the purchase of the business meals in past all right so now we're just going to pay that account off and therefore is cash affected yeah we paid with cash again so cash has a debit balance we're going to make it go down by doing the opposite thing to it which in this case is a credit and you might be saying we probably pay with a check but again this is the same thing cash and check we're going to put those in the same account for now the cash counts pretty much our checking account so we're going to copy that we're going to put that on the bottom because credits traditionally go on the bottom so we're going to right click in c18 and paste it 123 the amount will be for a negative credit being represented with negatives of 640 in cell in 18 if we credit something we're also going to have to debit something for that same 640 the debit will go on top and then the only question is what should that account be that we will debit well why did we pay cash because we bought stuff but we bought stuff in the past and now we're paying off what we owe the account showing that we owe people money is of course the accounts payable so accounts payable has that 960 we know we're going to debit it because we credit the cash does that make sense well 960 has a credit balance in it we need to make it go down because we paid it off and we don't owe 960 anymore because we paid off 640 of it how do we make something go down we do the opposite thing to it which in this case would be a debit so it doesn't make sense that we're going to debit it i'm going to copy this going to put that in cell c17 c17 it's right there and right click and paste it 123 all right so now we're going to post this out so we're going to post it first to the trial balance so here's the accounts payable here's the accounts payable here's the accounts payable where we want to post it it's got a bunch of stuff in it so i want to double click on it not delete all the stuff in it want to go to the end of it and say plus then post to that 640 what's going to happen it's going to make the accounts payable go down and it puts us out of balance then we're going to post the cash so cash is up here so we're going to post this cash to the trial balance here and we're going to post it to the blue area there's already something in it though therefore we're going to double click on it go to the end of it and then select plus and then we want to point to that 640 what's going to happen when we select enter it's going to bring the balance down here in the cash count and put us back in balance down here so there we have that then we're going to post the same information to the subsidiary ledger why because when we think about accounts payable the question will often be how much money do we owe people trial balance says we owe people 320 but who do we owe and who am i going to write the checkout to well let's take a look at the subsidiary ledger over here to answer that question so we'll go over to the subsidiary ledger which is in broken out by vendor and in this case we are talking about outback as the person we paid in p 10 so within p 10 we're going to say equals post this same activity that same 640 and enter so here's the normal activity we expect to see there's the 640 increase in the payable then we paid it so it went up and then it goes down to zero and we're also going to post that to the general ledger just to see the contrast between the general ledger and the subsidiary ledger for the account of accounts payable so we're going to be in the credit side i'm just going to post that same information in cell t 13 equals pointing to that 640 and once again that credit balance is going to go down from 960 to 320 so we can see that same kind of information that same pattern where we haven't went up 680 and then it goes down we paid it right we then it went up we bought something and then we haven't paid that one yet and then it went up and then we paid this one off so that's the normal thing we should be able to check off you know the activity that happens and see that pattern within an accounts payable account this of course being a bit simplified of account in the gl because it is in order only by date as opposed to over here it being ordered in order the same information by vendor and of course now the gl ties out to 320 as does the subsidiary ledger tying out to 320 and the trial balance also has 320