, 24.01.2020myjavier

# The accounts payable account has a beginning balance of \$12,000 and the company purchased \$50,000 of supplies on account during the month. the ending balance was \$10,000. how much did the company pay to creditors during the month? a. \$50,000. b.\$52,000. c. \$60,000. d. \$62,000

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\$52,000

Explanation:

Account payable represent the total amount that a business is owed its suppliers in repesct of trade supplies at a point in time. It represents  liability (owings) of the firm which is expected to be settled within a period of  year or less.. This makes them short-term liability

Opening balance for account payable represents what the business owes its suppliers as at the end of the last accounting period. This is usually brought forward at the beginning of a new period as opening balance.

Closing balance for account payable is the total amount a business owed to its supplier at the end of a particular period. Usually, this figure is arrived at as follows:

Closing account payable = opening balance + purchases during the period - amount paid to creditors

Applying this to the question, we have

10,000 = 12,000 + 50,000 - x

So we are looking for the value of X

10,000 = 12,000 +50,000 -X

X=12,000 + 50,000 - 10,000

X= 52,000

Amount paid by the company to its creditors is \$52,000

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