What transaction records payment for delivery equipment purchased on account?

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Multiple Choice

What transaction records payment for delivery equipment purchased on account?

Explanation:
Paying off a balance from a purchase on account reduces what you owe and also reduces your cash. The correct entry is to debit Accounts Payable (to remove the liability) and credit Cash (to reflect the cash leaving the business). Previously, the equipment would have been recorded as an asset with a credit to Accounts Payable when purchased on account, so settling that liability now requires debiting Accounts Payable and crediting Cash. The other options either increase cash, affect the asset again, or treat the payment as an expense rather than reducing the liability.

Paying off a balance from a purchase on account reduces what you owe and also reduces your cash. The correct entry is to debit Accounts Payable (to remove the liability) and credit Cash (to reflect the cash leaving the business). Previously, the equipment would have been recorded as an asset with a credit to Accounts Payable when purchased on account, so settling that liability now requires debiting Accounts Payable and crediting Cash. The other options either increase cash, affect the asset again, or treat the payment as an expense rather than reducing the liability.

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