U2, AOS 2: Lesson 2 - Accounts Payable (Pt.2)

Question 1

An Accounts Payable record is…

Answer 1

…a subsidiary Accounting record that records each individual transaction with each individual Account Payable and shows the balance owing to that Account Payable at any point in time.

Question 2

What qualitative characteristic is supported by the preparation of the Accounts Payable Schedule?

Answer 2

→ Faithful representation

Complete: information that presents the ‘whole picture’

Free from material error: means information that is accurate and can be checked or verified to support its accuracy.

Neutral (without bias): means information that is not subjective or based on guesses and usually means using information that is verifiable by reference to a source document.

Question 3

What would be the impact on the accounting equation for Uptown Ceramics?

A =

L =

OE =

Answer 3

A = Inventory ↓ 140 / Bank ↑ 154 = Overall ↑14

L = GST Payable ↑14 = Overall ↑14

OE = No effect