Question

Sonia is the head of the accounts department in a small manufacturing company. The company follows the accrual-basis method of accounting. It recently purchased raw materials worth $5,000 from its vendors. However, the company paid only $3,000 to its vendors. It plans to pay the remaining amount after three months. Considering this information, which entry should Sonia record in the company’s accounts?
A.
$5,000 as accounts receivable
B.
$3,000 as accounts payable
C.
$2,000 as accounts payable
D.
$2,000 as accounts receivable
E.
$3,000 as accounts receivable

Answer 1

Answer

C. $2000 as account payable

Explanation

In accrual-basis method of accounting, accrued wage entry is intended to record the amount of wages owed to workers. In this case, the company only paid $3000 with a balance amount of $2000 from the initial purchase worth $5000.The remaining $2000 will serve as the account payable because the goods are on credit.

Answer 2

Answer:

c

Explanation:

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