Choice "d" 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 "a" 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 "c" 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 "b" 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. |
