BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the previous balance is added to the new amount posted in the Credit column
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the source document number and page number of the journal are written in the Post. Ref column of the account
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the credit amount is written in the Debit column of the account
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balance is written in the item column
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Detailed explanation-1: -As a liability account, Accounts Payable is expected to have a credit balance. Hence, a credit entry will increase the balance in Accounts Payable and a debit entry will decrease the balance.
Detailed explanation-2: -Essentially, a “credit balance” refers to an amount that a business owes to a customer. It’s when a customer has paid you more than the current invoice stipulates. You can locate credit balances on the right side of a subsidiary ledger account or a general ledger account.
Detailed explanation-3: -A trial balance is a bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account column totals that are equal. A company prepares a trial balance periodically, usually at the end of every reporting period.
Detailed explanation-4: -Accounts payable (A/P) is the accounting term for money you owe to others for purchases you make on credit. They are current liabilities, meaning liabilities that are due within one year. The journal entry is a credit to Accounts Payable (to increase it, since it’s a liability) and a debit an expense account.