Your bookkeeper is off for the day and you are trying to figure out what her last entry in the journal could be for.Unfortunately,she only recorded the debit side of the transaction as $4,400 to Accounts Payable.It is possible that this debit could correspond to
A)a purchase of equipment costing $4,400 on credit.
B)a payment of $4,400 to a supplier to settle a balance due.
C)a $4,400 sale to a customer.
D)a $4,400 issuance of the company's capital stock.

Question

Quizplus · Accepted Answer

A debit to Accounts Payable would indicate that the company paid off a balance owed to a supplier, which corresponds to option B. Option A would have been recorded as an increase in Equipment and a corresponding increase in Accounts Payable. Option C would have been recorded as a credit to Accounts Receivable, and option D would have been recorded as an increase in Cash and an increase in Common Stock.

Your Bookkeeper Is Off for the Day and You Are