Question

Bank loan $60,000

Cash $30,000

Equipment $23,000

Share Capital $5000

unUsed Supplies $3000

During the month the company paid its suppliers $23,000 and purchased more supplies equal to $10,000 to be paid in 30 days.

What is the balance owing to its suppliers?

a. $22,000 credit

b. $22,000 debit

c. $78,000 credit

d. $68,000 debit

Answer 1

b.$22,000 debit.

Explanation

Liabilities	Amount	Assets	Amount
Share capital	$ 5,000	Cash	$ 30,000
Bank Loan	$ 60,000	Equipment	$ 23,000
		Unused supplies	$ 3,000
		Advance paid to suppliers(Balancing figure)	$ 9,000
Total	$ 65,000	Total	$ 65,000

Advance paid to supplier account

Particulars	Amount	Particulars	Amount
Beginning Balance	$ 9,000	Purchases	$ 10,000
Bank	$ 23,000	Balance c/d	$ 22,000
Total	$ 32,000	Total	$ 32,000

Advance paid to supplier is an asset account so it has debit $22,000 Balance