An invoice from a consultant was received for work done in May 2019. There was no previous record of the transaction. It will be paid in July 2019. In May 2019:
A) an asset decreased and an expense increased.
B) an asset decreased and a liability decreased.
C) a liability increased and an expense increased.
D) no entry is required until the next accounting period.

Question

Quizplus · Accepted Answer

The invoice from the consultant represents a liability for work done but not yet paid for. Therefore, a liability increased. Additionally, since the consultant provided a service in May 2019, an expense was incurred in that period. Therefore, an expense also increased.

An Invoice from a Consultant Was Received for Work Done