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Can you debit account payable and credit retained earnings?

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Question added by Ahmed Saeed , Supply Chain and Purchasing Manager , Tuff Gear Ltd.
Date Posted: 2014/01/09
Rehan Qureshi
by Rehan Qureshi , Financial Consultant , Self Employeed

yes you can.

mukkur srinivasan varadhan
by mukkur srinivasan varadhan , Chartered Accountant , Chartered Accountant in practice

Account payable not paid long and claimed and paid normally for more than3 years and not disputed ,decision can be taken to write back duly substatiated .Then it goes to P and L account only. The balance of P and L account is transferred to Retained Earnings Account.Write back becomes the the revenue of the year in whichn such decision was taken. 

Yes we can understand simply that.

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