When a business later pays cash to settle an Accounts Payable balance,…

Question

When a business later pays cash to settle an Accounts Payable balance, the journal entry is:

Accepted Answer

A. Debit Accounts Payable; credit Cash

1. Paying down a debt reduces the liability, so Accounts Payable is debited.
2. Cash is paid out, an asset decreasing, so Cash is credited.
3. The expense was already recorded when goods were received, so Supplies Expense is not used again, ruling out C and D.
4. Option A reverses the correct entry.
5. Therefore debit Accounts Payable and credit Cash.
_Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §1.4.6 "Expense Transactions on Account", p.32_

Answer

Debit Cash; credit Accounts Payable

Answer

Debit Supplies Expense; credit Cash

Answer

Debit Accounts Payable; credit Supplies Expense