yo yo yo cpa strength here back again with another accounting for beginners video this video we're
gonna do accounts payable as you can see by the title we've just done accounts receivable
so now i figured it makes sense to go into in accounts payable since basically the exact
opposite it's like a mirror image uh accounts payable is of accounts receivable accounts
receivable is an asset accounts payables liability so the journal entries are kind of reversed
so so to speak we're just going to get into this uh i am a licensed cpa in the state of
florida i struggled with accounting i started watching youtube videos to try
to learn because i was failing my cpa exam and i didn't know anything really about accounting
even though i had a four-year degree and i just developed a passion for youtube and here we are
here we are we got dc alert this is kind of my thing here it's a
debit credit asset distribution expense liability equity revenue um and if they're increasing on
the on the debit or the credit i go into this in in depth on many different videos if you haven't
if you're not familiar with it please watch the uh the playlist best best accounting playlist in
the world so anyways like i said this what this video is going to be in accounts accounts payable
in the first journal entry we are your business got two thousand dollars of inventory on account
so in the first journal entry here first journal entry you are gonna get inventory you are gonna
get products you're gonna get product and instead of giving them cash you're gonna say i i promise
you i'm gonna pay you the cash at a later date so i have an accounts payable to you at a later date
then our second journal entry your business paid back the two thousand dollars on account
our second journal entry basically you're gonna say hey hey guy who uh fronted me the two thousand
dollars thank you so much i am gonna pay you back now i have the money so here's the here's
the actual money and now i don't owe you anything anymore so that's kind of the real world example
let's go to the journal entry now we're gonna have we got two journal entries now every journal
entry has a debit and a credit they always equal and i'd say the debits are inherently not good
and good or bad or credits aren't good or bad they just are but they always always always equal
so let's go with the two journal entries and work through the dc adler and have some fun with this
now i am definitely for the underdog and let's go uh you know i tend to go slow a little bit
tell some stories i try to do better with that but i'm telling a story now so let's go
but i tend to go slow because i really struggled and the way i really learned this
is just by going slow and breaking it down and thinking about it and another thing is if this was
easy to you when you were getting it you probably wouldn't be on youtube looking up this stuff so
i already had an accounting degree and i really didn't
understand accounts payable in accounts receivable
i had to break it down into very small thing i had to break it down into um you know i got
fronted a hundred dollars or i fronted someone a hundred dollars and what what did that mean
i understood if i owed somebody money that's an account payable
if someone owes me money that's an account receivable yo juicy um so let's go with the
first the first journal entry your business got two thousand dollars of inventory on account
so break it up because there's always two parts and that was tough for me at first to
notice the two different parts of the journal entries when i started doing the accounting
with a bunch of practice i did learn so your business got two thousand dollars of inventory
i'm gonna say that's the first part and then on accounts the second part
so inventory inventory is an asset you're gonna know because that's gonna give you
an economic benefit in the future that's the definition of an asset
and you're gonna write the dca learn debit
uh you're gonna write this down here and you're gonna write next to it certain assets
so you're gonna know you know what common assets are that really helped
me when i was learning accounting so your inventory is going up in value
because you've got two thousand dollars of inventory
you know inventory is an asset it is increasing because you're getting two
thousand dollars of inventory so it's increasing so it is going up
that's gonna be our debit you're gonna debit inventory for two thousand dollars and it's an
asset why do we debit it for two thousand dollars because we got two thousand dollars of inventory
and we know it's an asset and increasing in value so we go to our dca alert and we see we know if
it's an asset increase in value we're going to debit it what's our credit on account meaning hey
we didn't pay you for it we're gonna pay you for it later at a later date
usually you get the you get these stuff you get the inventory and you pay them cash
but now you're getting in the inventory and you're saying hey i'll pay you cash later but i'll
basically give you an iou you know i'll pay you at a later date so we have an accounts payable here
now you're just gonna know if you get something on account or you get you know goods and services and
you say hey i'll pay you at a later date for goods and services is going to be an account payable
so we know liabilities are mostly payable wages payable accounts payable
loans payable payables payables i am liable to you at a later date
so we have we have a uh we know an account we have we know it's an account payable we know
account payable is going to be a liability and is it is our liability account increasing in value
well we didn't we never worked with this let's say we never worked with this person
before and now we owe them two thousand dollars so yes our liability account is going up
so if our liability account is going up we're going to credit it so that's our credit on our
first journal entry accounts payable for two thousand dollars because the liability
increasing in value do do they equal to the debits and credits equal yes they do and that's our first
journal entry we having fun yet are we learning stuff are we practicing this can change your life
not not i've been doing this for a while and not everybody learns this stuff i mean you can
make a good living doing this when's the last time you seen an unemployed accountant let's go
second journal entry i'm gonna say this one's a little bit easier because your business paid
back to two thousand dollars on account so anyways paid back the two thousand dollars
okay so you have so if you pay back the two thousand dollars that means you have less cash so
now i always if you know me because most journal entries most transactions have
cash involved with them so you're gonna know you're gonna watch the old videos if you've
been watching you know what to do with cash you're like oh i know what's going on with cash
if it's if it's decreasing i know cash is an asset i just know that from all the videos i've watched
very important cash is an asset now we have we have cash which is an asset decreasing in value
decreasing in value so that's going to be our credit to look your business paid back
the 2 000 on account so you have your cash which for two thousand dollars
which is an asset we know that decreasing in value now what's the second half of that on account
so basically you you got the good and the first ones you got the inventory you got the goods
right from from the plug on account you said hey i'll pay you back later all right so now
so that created what the accounts payable account that went up now you're saying hey here's my money
here's my cash and i'm paying you now our now our accounts payable i owe you two thousand dollars
now i don't owe you two thousand dollar now i don't owe you any money at all so that account
that that liability account is going down that accounts payable is going down
so if you have a liability account decreasing in value you're going to debit that so that's going
to be our debit in our second journal entry accounts payable debit see here's our debits
here's our credits debits on the left credits on the right
um does uh two thousand dollars debit two thousand dollars credit does that equal
yes you've always got to check that out you know if you're doing a journal entry like on
quickbooks or something or some software they won't even let you save it if it doesn't equal
it says oh debits don't equal credits like it has to always always always always equal credits
and i just i want to show you another little thing here
that basic that uh basically these these cancel out because at the end you don't have anything in
accounts payable you had two thousand dollars and then when you paid it back now it's down to zero
so you kind of you kind of cancel these two out you kind of cancel those two accounts out
and it's almost like it's almost like this never happened if you got inventory
and paid money for it it's just an extra step
uh if you have if you have questions if you have questions
definitely drop question in there i'll i'll answer if you want to see a future video i'll do that
anyways um uh since we're kind of done with the lesson try to keep this quick
i do wanna two things that are i'm thinking about that changed changed my life
number one uh stopping hating people was my inflection point like i stopped hating
myself and other people and i just stopped hating things i stopped hating everything
i just i switched the hate to love and that really helped me another thing is
you've got to love yourself okay uh before i love myself which i just started loving myself about
uh eight months it's been about eight months now i never enjoyed anything i had i had a
a hole i had a hole in the middle of my body that was empty i could not fill it up with anything
no amount of accomplishments no a co no amount of anything ever filled this little hole up until
i started loving myself until i started telling myself every morning hey bro i love you i love you
okay when before i loved myself when i hated everything i would just hate everything
and uh it made my life miserable miserable so when before i before i hated when i hated
myself when i didn't love myself i thought oh you know what i'm saying if when i i lo i'll
lose weight i'll be ha i'll be happy uh if i get 100 000 subscribers on youtube i'll be happy if i
get a college degree i'll be happy if i get a car i'll be happy if i get a cpa license i'll be happy
if i open a successful business i'll be happy and every accomplishment i had never made me happy
never did anything to my self-esteem never did anything until i started loving myself
i hated my business i didn't enjoy making the youtube videos until i started loving myself
and then i said you know what it wasn't these activities that i didn't like it
was that i didn't love myself so you gotta love yourself please
anyway that's my rant for the day hope you learned something hope you love yourself take care deuces