BUSINESS ADMINISTRATION
BUSINESS ENVIRONMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Accounts Payable
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Supplies
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Accounts Receivable
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Cash
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Detailed explanation-1: -Accounts payable are assets which are increased on the left side of the T-account. Accounts payable refer to promises to pay later, which may arise from the purchase of supplies or services.
Detailed explanation-2: -Accounts receivable are held by a seller and refer to promises of payment from customers to sellers. These transactions are often called credit sales or sales on account (or on credit). Accounts receivable are increased by credit sales and billings to customers, but are decreased by customer payments.
Detailed explanation-3: -Correct Answer: Option b. Promises of future payment are called accounts payable.
Detailed explanation-4: -Accounts receivable refer to the money a company’s customers owe for goods or services they have received but not yet paid for. For example, when customers purchase products on credit, the amount owed gets added to the accounts receivable. It’s an obligation created through a business transaction.