The Accounting Entry to Record the Payment of a Liability

question 20

Multiple Choice

The accounting entry to record the payment of a liability is which of the following?

• A) Debit an asset account and credit a liability account
• B) Debit a liability account and credit an asset account
• C) Debit an equity account and credit a liability account
• D) Debit a liability account and credit an equity account

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Definitions:

Tax Bracket

The range of incomes taxed at a specified rate by the government, part of a progressive tax system where tax rates increase with income.

Corporate Bond

A debt security issued by a corporation to raise capital, obligating the issuer to pay interest and repay the principal at a specified date.

Investment Strategy

An investor's plan of distributing assets among various investments aimed at achieving a specific financial goal.

Dividends

Payments made by a corporation to its shareholder members from the company's earnings.