The Accounts Payable Balance at the Beginning of the Year

question 66

Multiple Choice

The accounts payable balance at the beginning of the year was $85,000.The company purchased $380,000 worth of goods on account,and the ending balance of the payables account was $70,000. What were the total payments on account?

• A) $450,000
• B) $395,000
• C) $535,000
• D) $465,000

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Definitions:

Fair Market Value

The price at which an asset would trade in a competitive auction setting.

Sam, Capital

An account representing the owner's (Sam's) equity or ownership interest in a business.

Profit and Loss Ratio

An indicator that measures the ratio of profits earned to losses incurred over a particular period, often used to assess a company's financial health.

Income Summary

A temporary account in the ledger that summarizes revenue and expenses and transfers the balance (net income or net loss) to Capital. This account does not have a normal balance, i.e. it could have a debit or a credit balance.