What is the entry to record paying off accounts payable of $4,100?

• A. Debit Cash $4,100, Credit Cash $4,100.
• B. Debit Accounts Payable $4,100, Credit Cash $4,100.
• C. Debit Service Revenue $4,100, Credit Accounts Payable $4,100.
• D. Debit Accounts Receivable $4,100, Credit Cash $4,100.

Answer: (B)

Paying off a payable reduces what you owe and decreases cash. In double-entry accounting, liabilities are decreased by debiting them, and cash (an asset) is decreased by crediting it. So the correct entry is to debit Accounts Payable for 4,100 and credit Cash for 4,100. This records that you’ve settled the obligation and paid out cash.

The other entries don’t fit: debiting and crediting Cash against itself isn’t a valid way to reflect a payment; debiting Service Revenue would incorrectly affect income, and debiting Accounts Receivable would relate to money owed to you, not money you owe.