Mackay,Inc.paid one of its creditors $678 on their balance due.The journal entry would require a:
A)debit to Cash and a credit to Accounts Payable.
B)debit to Cash and a credit to Accounts Receivable.
C)credit to Cash and a debit to Accounts Receivable.
D)debit to Accounts Payable and credit to Cash.

Question

Quizplus · Accepted Answer

Since Mackay Inc. is paying a creditor (someone it owes money to), the entry would involve reducing the balance in the Accounts Payable account. This would be achieved with a debit to Accounts Payable. At the same time, the payment is being made in cash, so there must be a credit to the Cash account. Therefore, the correct option is D - debit to Accounts Payable and credit to Cash.