Question

A sole proprietorship has the following transactions: The business received $22,000 cash from the owner in exchange for capital The business purchases $500 of office supplies on account. The business purchases $2,000 of furniture on account. The business performs services to various clients totaling $11,000 on account. The business pays out $2,000 for salaries expense and $6,000 for rent expense. The business pays $500 to a supplier for the office supplies purchased earlier. The business collects $2,000 from one of its clients for services rendered earlier in the month. At the end of the month, all journal entries are posted to the ledger, Accounts Payable will appear as which of the following?

Answer 1

Answer:

Option A.

Accounts Payable

	500	500
		2,000
		2,000	Bal

Explanation:

• First, the office supplies were purchased on account for $500. Thus Accounts Payable A/ c is credited by $500
• Furniture on account was purchased on account for $2,000. Thus Accounts Payable A/ c is credited by $2,000
• The supplier for the office supplies are paid $500.. Thus Accounts Payable A/ c is debited by $500.
• The end of the month credit balance in Accounts Payable A/ c is $2,000