In accounting, how do you show a business credit card payment with a business checking account? -

I want to show a payment from business checking to my business credit card - should it be a transfer of funds?

Well whenever you made a purchase on the credit card you should debit the appropriate account for which the purchase was made, and credit accounts payable, which is a liability account as the money will need to be paid back to the credit card company. Even set up a an account called Accounts Payable - Credit Card to see exact what s going on the card.Then when you make the payment with a checking account, which is equivalent to cash, you would debit accounts payable - credit card, and credit your cash account. For example:You buy $100 worth of InventoryDr Inventory 100Cr Accounts payable - credit cardThen, you pay $50 for phone bill for last monthDr Utilities expense 50Cr Accounts payable - credit card 50Now it s the end of the month an you write and mail a cheque to your credit card company for the full amount owingCr Accounts payable - credit card 150Dr Cash 150That s it. In order to stay in compliance with GAAP or IFRS, unless the purchase is immaterial, you need to make sure every time you make a purchase on the card it is put into the right account, not just some account like Credit card purchases .