Thursday, February 18, 2010

Prepare Correct Trial Balance

How do you prepare the correct trial balance based on this following information?

There was a payment balance due to the company for $206 which was then  credited to Cash for $206 and credited to account payable for $260.

Accounting Answer:

In this situation, the normal postings to accounts payable are CREDIT in the case of creating a payable entry or DEBITS in the case of making a payment entry.

Therefore, payment balance due to for $206 means that a payment would be made from accounts payable a debit and credited to cash on the accounting ledger.

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