If Beginning Accounts Payable Is $10,000 and the Purchases on Account

question 104

Multiple Choice

If beginning Accounts Payable is $10,000 and the purchases on account are $100,000 and payments made were $80,000 during the period,then the ending Accounts Payable balance is:

• A) $30,000 credit
• B) $20,000 credit
• C) $20,000 debit
• D) $30,000 debit

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable costs have been deducted, indicating how much contributes to covering fixed costs and profit.

Fixed Corporate Costs

Expenses that do not vary with production volume or sales, such as salaries of managerial staff and rent for corporate headquarters.

Fixed Expenses

Costs that do not fluctuate with changes in production level or sales volume.

Avoidable Expenses

Costs that can be eliminated if a certain decision is made, such as discontinuing a product line.