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- Name – Quiz 12 – Accounts Payable- (Answers)
- Topic – Accounts Payable
- Answers with Explanation
Q1. Accounts Payable A/C’ is _____ when the invoice is recorded.
Ans. When an invoice is recorded the company’s accounts payable increase. In such a case ‘Accounts Payable A/C’ is credited. Rule – Credit the increase in liability.
Q2. Accounts Payable A/C’ is _____ when payment is made to vendors.
Ans. When payment is made to a vendor accounts payable is debited because the accounts payable balance decreases. Rule – debit the decrease in liability.
Q3. Accounts payable is also called _____.
Ans. Accounts payable are also known as trade payable or accounts payable.
Q4. Accounts payable usually have _____ balance.
Ans. As accounts payable is a liability, it usually has credit balance.
Q5. Purchase ledger control account (PLCA) is _____.
Ans. Also known as the “Trade Creditor Control A/C,” the Purchase Ledger Control Account shows the total trade creditors owed by a company at a particular point in time. In simple words ‘Total of Accounts Payable’.
Q6. Accounts payable is _____.
Ans. It is a company’s short-term obligation i.e. the total amount due to be paid to the creditors.
Q7. Accounts payable are shown on _____.
Ans. Accounts payable are shown on the liability side of a balance sheet.
Q8. Accounts payable are recorded in _____.
Ans. A purchase book is a special-purpose subsidiary book kept by a business for recording all credit purchases.
Q9. Accounts payable is the amount due to be paid back to the _____.
Ans. Basically, it is the amount which the business has yet to repay to its creditors.
Q10. Accounts payable is a _____ liability.
Ans. Accounts payable is a short-term (current) liability for the business.
Q11. Accounts payable are obligations of a business that arise from _____.
Ans. Accounts payable are obligations of a business that originate because of purchases made on credit e.g. purchase of raw material, finished goods etc.
