Question

Your bookkeeper is off for the day and you're trying to figure out the last entry she recorded in the journal. She only recorded part of the transaction as a decrease of $4,400 in the accounts payable account. It is possible that this partial entry could correspond to:

1) A purchase of equipment costing $4,400 on credit
2) A payment of $4,400 to a supplier to settle a balance due
3) A $4,400 sale to a customer
4) A $4,400 issuance of the company's capital stock

Answer 1

The partial entry of a decrease of $4,400 in the accounts payable account could correspond to a payment of $4,400 to a supplier to settle a balance due.

Step-by-step explanation:

The partial entry of a decrease of $4,400 in the accounts payable account could correspond to option 2) A payment of $4,400 to a supplier to settle a balance due.

When a company makes a payment to a supplier, it reduces the accounts payable balance. Therefore, a decrease in the accounts payable account suggests that a payment has been made to settle a balance due.

For example, if the company had a $4,400 unpaid balance with a supplier and made a payment to settle the outstanding amount, it would result in a decrease in the accounts payable account by $4,400.