How to know what goes to the income statment in the T account ?

topcat

Currently doing Cash Management and have forgot the reasoning by what goes to the income statement in T account for example

A Ltd has trade payables at 1 January of £12,000. During the year total purchases recorded in the income statement was £262,000. At 31 December trade payables amounted to £10,500. From the data given, calculate the actual cash payments for purchases for the year to 31 December.

Debit

close parables 10500

Credit

Open payable 12000
Income statement 262000

why would the income statment be a credit i know it should be but don't understand why?

liveprincess

because this is creditors - liability therefore it goes on the credit side in the IS

topcat

brilliant THANK YOU!!:thumbup1: