Question

Below is one of the t-accounts ABC Inc. has. The Accounts Payable account has a beginning balance of $500. It was credited $400 and $200 during the period. It was debited by $800 and $25 during the period. Compute its account balance paying special attention to whether the balance ends up on the debit or credit side, and answer the question below. What is the account's balance?

Answer 1

The ending balance of the Accounts Payable account for ABC Inc. is a credit balance of $275, after accounting for the beginning balance and all credits and debits during the period.

Step-by-step explanation:

The question pertains to calculating the ending balance of the Accounts Payable account for ABC Inc. The beginning balance is $500, with additional credits of $400 and $200, and debits of $800 and $25. To calculate the ending balance, we sum the credits ($500 + $400 + $200) and then subtract the debits ($800 + $25) from the total credits.

The computations would be:

• Total Credits: $500 + $400 + $200 = $1100
• Total Debits: $800 + $25 = $825
• Ending Balance (Credits - Debits): $1100 - $825 = $275

Since Accounts Payable is a liability account, a credit balance is expected. The ending balance of the Accounts Payable account is therefore a credit of $275.

Answer 2

The account's balance is $275

Step-by-step explanation:

Accounts Payable account's balance, according with the nature of the account that is credit, you have to sum the credited movement it means that you have to sum $400 and $200, it gives a result of $1100, after of this, you have to subtract the debited movements $800 and $25, the result of the operation of $275 total that represents the account's balance.

Debit Credit

500

+400

+200

-800

-25

= $275