Williams Company Began Business on May 1

question 154

Essay

Williams Company began business on May 1. They use the periodic inventory method. The following transactions involving purchases and cash disbursements occurred during the first week of May:
a. Use the purchases journal and the cash disbursements journal to record these transactions
b. Prepare a schedule of accounts payable as of May 7. There was no accounts payable on May 1.

---

Definitions:

Equilibrium Quantity

The quantity of goods supplied is equal to the quantity demanded at the market equilibrium price.

Normal Good

A good for which demand increases when consumer income rises, and falls when consumer income decreases, all other factors being constant.

Demand Curve

A graphical representation that shows the relationship between the price of a good and the quantity demanded by consumers.

Equilibrium Price

The price in the market where the amount of a product that consumers want to buy is the same as the amount available for sale, resulting in a balanced market situation.