During April, Giselle Corp.paid $3,000 on account for supplies that were purchased, recorded, and used during March.In recording this transaction, Giselle will
A) debit Accounts Payable and credit Cash.
B) debit Shareholders' equity and credit Accounts Payable.
C) debit Supplies Expense and credit Accounts Payable.
D) accrue an expense of $3,000.

Question

Quizplus · Accepted Answer

When Giselle Corp. pays $3,000 on account for supplies that were previously purchased and used, the company is settling an outstanding liability. This is recorded by debiting (decreasing) Accounts Payable to reflect the payment of the liability and crediting (decreasing) Cash to reflect the outflow of cash.