Martin Supply Service Paid $350 Cash to a Materials Supplier

question 88

Multiple Choice

Martin Supply Service paid $350 cash to a materials supplier that it owed from the previous month.What is the effect of the cash payment on accounts of the business?

• A) Materials account increases; Owner's capital account decreases.
• B) Cash account decreases; Accounts payable increases.
• C) Accounts payable increases; Owner's capital account decreases.
• D) Cash account decreases; Accounts payable decreases.

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Definitions:

Activity-Based Costing

A method in accounting that assigns costs to products or services based on the activities and resources that go into producing them, aiming for more accurate costing.

Resolving Queries

The process of addressing and answering questions or concerns, commonly within a customer service or information technology context.

Time-Driven

This term generally refers to activities or processes that are measured and managed based on the time they take, often in the context of cost accounting or service delivery.

Activity-Based Costing

An activity-based costing method that locates actions within an organization and delegates the expense of these actions to all offerings and products as per their actual usage.