A Business Buys $500 of Supplies on Account

question 130

Multiple Choice

A business buys $500 of supplies on account.Which account is credited?

• A) Cash
• B) Accounts payable
• C) Supplies
• D) Service revenue

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Definitions:

Standard Cost System

An accounting system that uses standard costs for cost control and decision-making purposes.

Actual Results

The real, achieved outcomes of business activities, such as sales, expenses, and profits, which are compared against planned or forecasted results.

Standard Hours

The predetermined amount of time expected to complete a task, job, or project.

Variable Manufacturing Overhead

Costs that vary directly with the level of production output, such as indirect materials and indirect labor that increase as production increases.