John Co Had a Cost of Sales, During the Year

question 2

Multiple Choice

John Co had a cost of sales, during the year just ended, of $280 000. During the year accounts payable and inventory each increased by $12 000. What amount of cash was paid for purchases during the year?

• A) $256 000
• B) $268 000
• C) $280 000
• D) $292 000

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Definitions:

Credit Column

The section of an accounting record where increases in liabilities, revenues, and equity accounts are recorded.

Debit Column

The Debit Column is the left-hand side of an account record in double-entry bookkeeping, used to record increases in asset, expense, and loss accounts, and decreases in liability, equity, and revenue accounts.

General Journal

A primary accounting record used to document all financial transactions in chronological order.

Services Provided

Activities performed by a company or individual for the benefit or use of another party, typically in exchange for compensation.