On a company’s trial balance, Accounts Payable is typically classified as which type of account and normally appears in which column?

• A. An asset account with a normal debit balance; it appears in the debit column.
• B. A liability account with a normal credit balance; it appears in the credit column.
• C. A revenue account with a normal credit balance; it appears in the credit column.
• D. An expense account with a normal debit balance; it appears in the debit column.

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the nature of Accounts Payable. Accounts Payable represents amounts a company owes to its suppliers or creditors, which means it is a liability.
2. Step 2: Recall the normal balance for liability accounts. Liability accounts normally have a credit balance because they represent obligations the company must pay in the future.
3. Step 3: Identify where Accounts Payable appears on the trial balance. Since it is a liability with a normal credit balance, it will appear in the credit column of the trial balance.
4. Step 4: Differentiate Accounts Payable from other account types. Asset accounts have normal debit balances and appear in the debit column, revenue accounts have normal credit balances but represent income, and expense accounts have normal debit balances.
5. Step 5: Conclude that Accounts Payable is classified as a liability account with a normal credit balance and appears in the credit column on the trial balance.