An invoice from a consultant was received for work done in May 2016.There was no previous record of the transaction.It will be paid in July 2016.In May 2016:
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

In May 2016, when the work was done and the invoice received, the company would record the expense for the consulting services (increasing expenses) and recognize a liability (accounts payable) for the amount owed to the consultant, thus increasing liabilities.

An Invoice from a Consultant Was Received for Work Done