Question

Nick’s Burritos purchases its inventory, on account, daily. At December 31, 2016, the company had taken receipt of $160,000 of inventory from its suppliers which had not been recorded in the accounts. If Nick’s Burritos makes the appropriate adjusting entry, how much will be reported on the December 31, 2016, balance sheet as accounts payable?

Answer 1

Answer:

The $160,000 will be reported on the December 31, 2016, balance sheet as accounts payable

Explanation:

Account payable: The account payable is the amount in which the purchase of an item on a credit basis is recorded and the payment is to be made at the later date. It has come under the current liabilities on the balance sheet side.  

In the given question, the purchase of inventory is made for $160,000 on a credit basis. Along with it, the receipt is also taken from the supplier. So, the same amount i.e $160,000 will be recorded in accounts payable