Answer:
The payments to creditors during the month were of $35000.
Explanation:
To calculate the payment to the creditors, we first need to find out the total amount that was due to the creditors for the month and then deduct the ending balance from that amount to determine the payments made to creditors. The total amount that was due to creditors for the month was,
Accounts Payable amount due for the month = Opening balance of Accounts Payable + Purchases on credit
Accounts Payable amount due = 15000 + 40000 = $55000
The payments for the month = 55000 - 20000 = $35000
The amount paid to the creditors during the month is $35,000.
Accounts payable represents a liability of the business with respect to the money owed by its suppliers. The accounts payable have a credit balance. Purchases on account increases the accounts payable, whereas payments, and discounts decrease the same.
The amount paid to accounts payable can be calculated as follows:
[tex]\rm Payment = Beginning\:balance+Purchase-Closing\:balance\\\\\rm Payment = \$15,000+\$40,000-\$20,000\\\\\rm Payment = \$35,000[/tex]
Therefore the amount paid to accounts payable is $35,000.
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