Help me: his business sells products for local artisans using Square POS. Sales transactions debit Cash and credit Vendors Payable. When paying vendors, they debit Vendors Payable and credit Cash. The owner received a Square loan, repaid through a percentage of daily sales deposited into their bank account. Initially, the loan issuance was recorded by debiting Cash and crediting Square Loan. Monthly, loan payments are posted based on a report detailing daily deductions. To ensure vendors receive full payment, an adjustment is made: debiting Square Loan Payable and crediting Vendors Payable. However, this has resulted in a continuous credit balance in Vendors Payable, suggesting an error. The dilemma lies in determining the correct credit entry when decreasing the Square Loan Payable.

Answer rating: 100% (QA)

It seems like there might be a misunderstanding in the accounting treatment of the Square Loan repay... View the full answer