A Business Makes a Cash Payment to a Supplier on Account

question 116

Multiple Choice

A business makes a cash payment to a supplier on account (for Office Supplies which were purchased earlier.) Which of the following accounts will be debited?

• A)Cash
• B)Accounts Payable
• C)Office Supplies
• D)Utilities Expense

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Definitions:

Net Income

The profit of a company after all expenses and taxes have been deducted from revenue.

Operating Expenses

Operating expenses are the costs associated with running a business's day-to-day operations, excluding the cost of goods sold.

Gross Profit

The difference between the revenue earned from selling goods or services and the cost of goods sold, not including overhead or other indirect expenses.

Cost of Goods Sold

The direct monetary requirements for producing goods that a company sells, involving both materials and workforce.