Which Of The Following Statements Is Accurate Regarding Accounts Payable?
The correct answer of this multiple choice question (mcq) is C, as Accounts Payable Or Sundry Creditors shows that amount of money which the business promises to pay to suppliers / vendors later for the goods / merchandise / supplies or services purchased on account / credit and it is recorded based on the accounting concept known as Accrual Basis of Accounting . When the business does not pay to vendor immediately but promises to pay later for supplies purchased, then it creates a Current Liability for the business to pay within the specified time period not exceeding the one year. The journal entry to record is to debit supplies account (as a Current Asset ) and credit accounts payable account. As the business is purchasing supplies, so these are increasing and coming into the business, so we debit supplies account. Accounts payable is also increasing as the business is liable to pay to vendors for supplies purchased on account, so we credit it according to the Rules of Debit And...