Which of the Following Entries Records the Payment of an Account

question 222

Multiple Choice

Which of the following entries records the payment of an account payable?

• A) debit Cash; credit Accounts Payable
• B) debit Accounts Receivable; credit Cash
• C) debit Cash; credit Supplies Expense
• D) debit Accounts Payable; credit Cash

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Definitions:

Flexible Short-term Policy

A financial strategy that allows for maintaining a higher level of current assets, providing a buffer against unforeseen liabilities or expenses.

Restrictive Short-term Policy

A financial policy aimed at minimizing the amount of working capital to reduce short-term financing costs, often at the risk of running low on liquidity.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of the business, whichever is longer.

Cash Flow Time Line

A visual representation that maps out all cash inflows and outflows of a project or investment over time.