Choice "C" is correct. This question is a simple financial accounting Account Analysis Format (BASE mnemonic, or AAF) question for the accounts payable account. The purchases are a plug and can be determined as follows:
Beginning balance | $ 64,000 | (given) |
Add: Purchases | 441,000 | (plug) |
Subtract: Cash payments | (455,000) | (given) |
Ending balance | $ 50,000 | (given) |
Choice "d" is incorrect. This choice is incorrect per the analysis above. The $469,000 appears to be the $455,000 cash payments plus the $64,000 beginning of year balance less the $50,000 end of year balance. If the AAF format is rearranged (not the suggested way of working with an AAF), that is backwards.
Choice "b" is incorrect. This choice is incorrect per the analysis above. The $505,000 appears to be the $455,000 cash payments plus the $50,000 end of year balance.
Choice "a" is incorrect. This choice is incorrect given the analysis above. The $519,000 appears to be the $455,000 cash payments plus the $64,000 beginning of year balance.
