John Co Had a Cost of Sales, During the Year

question 2

Multiple Choice

John Co had a cost of sales, during the year just ended, of $280 000. During the year accounts payable and inventory each increased by $12 000. What amount of cash was paid for purchases during the year?

• A) $256 000
• B) $268 000
• C) $280 000
• D) $292 000

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Definitions:

Special Journals

Accounting journals designed for the repeated recording of specific types of transactions, such as sales or purchases, to streamline the accounting process.

Cash

A form of liquid asset that represents the currency that a business or individual can immediately access and use for transactions.

Receivables

Funds that are owed to a company by its customers or clients for goods or services already delivered.

Payables

Short-term liabilities of a company, representing amounts owed to suppliers or creditors for goods and services received but not yet paid for.