Barista Company pays a vendor $900 cash as partial payment for its earlier $1,800 purchase of supplies on credit.How would Barista record this payment?

Question

Quizplus · Accepted Answer

When Barista pays the vendor $900 cash as partial payment for the $1,800 purchase of supplies on credit, the Accounts Payable account decreases by $900 to reflect the payment, while the Cash account decreases by the same amount since cash is being used to make the payment. No change is made to the Supplies account, as the payment only reduces the outstanding balance owed to the vendor, not the amount of supplies previously purchased on credit.

Barista Company Pays a Vendor $900 Cash as Partial Payment