If you don't have a large number of outstanding invoices, you may decide on a shortcut. Instead of entering invoice details to the system when you receive them, you file the invoices in folders arranged according to the date when payment is due. If you make payments in the same month, you remove the invoice from the folder and make an entry in the Cash Disbursements Journal when you write the check. If the invoices are not paid until a following month, you find the amount owed at the end of the current month by totaling the unpaid invoices. You credit this amount to Creditors and debit it to the proper asset and expense accounts. This process is called an adjusting entry and is described in a later section.
If you decide not to record purchase invoices in the accounts at all, you hold the invoices until you pay them. If the invoice amounts are small, this procedure can be satisfactory. However, if the amounts are significant, omitting them from the system does not give an accurate record of the financial status of the entity.