How Does an Account Payable Arise with a Vendor

question 7

Multiple Choice

How does an account payable arise with a vendor?

• A)When our business makes a cash purchase,it promises to pay the same amount again for future purchases.
• B)When our customers purchase amounts from us,they promise to pay us in the future.
• C)When we return purchases to our vendor,they promise to pay us for the amounts returned.
• D)When our business purchases on credit,it promises to pay that amount in the future.

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Definitions:

Accounting Services

Professional services that include bookkeeping, tax preparation, auditing, and financial analysis for individuals or businesses.

Unadjusted Trial Balance

A financial statement listing all the accounts and their balances before any adjustments are made, used for internal purposes to check the balance of debits and credits.

Depreciation Expense

The allocated amount of the cost of an asset over its useful life, used to account for declines in value.

Accrued Revenues

Revenues that have been earned but not yet received in cash or recorded by the entity, representing assets on the balance sheet.