Which of the following is correct, assuming the following transaction: Kennedy Company received and paid the rent for the month.
A) Rent Expense is debited.
B) Cash is debited.
C) Rent Expense is credited.
D) Accounts Payable is debited.

Question

Quizplus · Accepted Answer

Rent Expense is debited because it reflects the cost incurred by Kennedy Company for using the rental space during the month, which decreases equity. Cash is credited (not debited) because the payment of rent decreases the company's cash balance.

Which of the Following Is Correct, Assuming the Following Transaction