When a Cash Disbursement in Payment of an Accounts Payable

question 60

Multiple Choice

When a cash disbursement in payment of an accounts payable is recorded

• A)the liability account is increased
• B)the income statement is changed
• C)the cash account is unchanged
• D)the liability account is decreased

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Definitions:

Net Sales

Revenue from sales transactions after deducting returns, allowances for damaged goods, and discounts.

Assets

Resources owned or controlled by a business, expected to produce future economic benefits.

Profit Margin

A financial metric that measures the percentage of revenue remaining after all expenses have been deducted from sales.

Equity Multiplier

A financial leverage ratio that measures the portion of a company's assets financed by its shareholders' equity.