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winspire
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A company’s trade payables account at 30 September 20X1 is as follows:
TRADE PAYABLES ACCOUNT
$ $
Cash at bank 21,600 Balance b/d 14,000
Balance c/d 11,900 Purchases 19,500
33,500 33,500
What was the balance for trade payables in the trial balance at 1 October 20X0?
What was the balance for trade payables in the trial balance at 1 October 2010?A $14,000 DR
B $14,000 CR
C $11,900 DR
D $11,900 CRWhy this answer is B
In this question opening balance is on credit side ,so closing balance at previous year will be at debit side right?
Pls explain this questionIn future you must ask in the Ask the Tutor Forum if you want me to answer. This forum is for students to help each other 🙂
The opening balance is a credit balance (as you can see from the account).
The balancing figure at the end of the year of 11,900 appears on the debit side to balance the account, but as always is then carried forward to the opposite side. So the closing balance is a credit balance of 11,900. (The balance on payables must always be a credit balance because it is a liability).
The question asks for the opening balance and so the answer is B as per the first line of this reply.
I do suggest that you watch my free lectures with regard to the balancing of accounts. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
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