The following activities occurred in 2011: Billed customers for advertising serv
ID: 2569528 • Letter: T
Question
The following activities occurred in 2011:
Billed customers for advertising services rendered, $55,000.
Received cash from customers in payment of their accounts, $10,400.
Incurred $45,000 of operating expenses of which $39,000 was paid in cash and $6,000 was on account and unpaid as of the end of the year.
Paid suppliers $5,000 on the accounts payable.
Received deposits from customers of $2,500 for advertising services to be performed in 2012.
Which of the following is the journal entry to record activity #4?
Explanation / Answer
The correct answer is
This is because when the Suppliers are Paid $ 5,000 in cash, there is an outflowof cash and a decrease in the axcounts payable.
Cash being an asset, a decrease / outflow is credited and accounts payable being a liability, a decrease is debited.
b. Accounts Payable 5,000 Cash 5,000Related Questions
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