The account "Notes Payable" began with a zero balance and then had the following changes: increase of $500,increase of $200,decrease of $550,and an increase of $250.The final balance is a:
A)credit balance of $550.
B)debit balance of $950.
C)credit balance of $400.
D)debit balance of $400.

Question

Quizplus · Accepted Answer

The initial balance of the "Notes Payable" account was zero, and subsequently, there were four changes:
1. An increase of $500 = $500 (debit)
2. An increase of $200 = $700 (debit)
3. A decrease of $550 = $150 (debit)
4. An increase of $250 = $400 (debit)

Therefore, the final balance of the "Notes Payable" account is a debit balance of $400. Option C, credit balance of $400, is incorrect because the account has a debit balance, not a credit balance. Option A, credit balance of $550, and option B, debit balance of $950, are also incorrect as they do not reflect the true final balance of the account.

The Account "Notes Payable" Began with a Zero Balance and Then