The business incurred an expense and paid it immediately. To record this,
A) an expense is debited and a liability is credited.
B) an expense is debited and an asset is credited.
C) an expense is debited and Capital is credited.
D) None of these are correct.

Question

Quizplus · Accepted Answer

When a business incurs an expense and pays it immediately, the expense account should be debited to reflect the increase in expenses, while an asset account (such as cash) should be credited to reflect the decrease in the asset caused by the payment. Therefore, option B is the correct choice.

The Business Incurred an Expense and Paid It Immediately