During the month of October, Ford advertised on the Internet. Ford received the bill for $600 in October, but waited until November to pay the advertising expense. The journal entry to record the payment in November is
A) Accounts Payable debit; Cash credit.
B) Advertising Expense debit; Accounts Payable credit.
C) Advertising Expense debit; Cash credit.
D) A journal entry is not made in November.

Question

Quizplus · Accepted Answer

The correct journal entry to record the payment of an expense previously incurred (and presumably recorded as a payable) is to debit Accounts Payable, reducing the liability, and to credit Cash, reflecting the outflow of cash to settle the liability.

During the Month of October, Ford Advertised on the Internet