A bill from a consultant was received for work done in May 2012.There was no previous record of the transaction.It will be paid in July 2012.In May 2012:
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 2012, the company should recognize the expense for the consultant's work and record a liability for the amount owed, as the work was completed and the obligation to pay exists.

A Bill from a Consultant Was Received for Work Done