An Accounts Payable Ledger

question 48

Multiple Choice

An accounts payable ledger:

• A) Contains a separate account for each creditor (supplier) to the company.
• B) Is a book of original entry designed and used for recording only a specified type of transaction.
• C) Contains the financial statement accounts of a business.
• D) Contains an account for each credit customer.
• E) Lists the balances of selected accounts that are added to show the total amount of the significant long-term creditors outstanding.

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Definitions:

Variable Cost

Costs that change in proportion to the level of goods or services that a business produces.

Breakeven Volume

The quantity of products sold or services rendered at which total revenues equal total costs, resulting in no net loss or gain.

Sales Revenues

The income earned by a company from its sales of goods or the provision of services before any costs or expenses are deducted.

Operating Income

Operating income, also known as operating profit or Earnings Before Interest and Taxes (EBIT), is a measure of the profit a company generates from its operations, before subtracting interest expenses and taxes.