Debit/Credit on Purchase Invoice and Payment Entry

Sorry for the dumb question here… not an accounting person so go easy on me.

If I create a purchase invoice, there’s a CREDIT TO field. I put in my Electricity Expense account there so it will credit this to that account.

Then, I convert this purchase invoice into a payment entry and it asks for debit and credit account. Am I going to DEBIT the electricity expense account and CREDIT my bank account that the money is coming out of to pay it? Does this all make sense and am I thinking this correctly?

share you screencast while asking questions. That makes visualizing what you do and is the something which needs to be changed.

On your accounting question:

  1. Purchase Entry:
    Purchase Account Debit (i.e. your expense accounts tagged to your item purchase cost)
    To Accounts Payable A/c (which is tagged to your supplier)

  2. Payment Entry:
    Accounts Payable A/c (linked to Supplier) - this happens when you allocated the amount paid
    To Cash/Bank Account, which ever you select

Sorry, not really a screencast to show you as I’m just trying to figure it out and don’t have it fully working. Thanks for replying.