Classic Artists' Services has hired a maintenance man to maintain a building they use for instruction. He will begin work on 1 February and work through until 31 May. They will pay the maintenance man $2 000 at the end of May. Classic Artists' Services accrue Maintenance expense at the end of every month. What is the balance in the Accounts payable account for amounts owed to the maintenance man at the end of March?

Question

Quizplus · Accepted Answer

By the end of March, the maintenance man has worked for two months (February and March), so the accrued expense is $1,000 per month for two months, totaling $2,000. However, since they accrue monthly, the balance in Accounts Payable would be $1,000 by the end of March.

Classic Artists' Services Has Hired a Maintenance Man to Maintain