Hamilton Lawn Service incurred $500 as labor expense and promised to pay the labor agency within 30 days. Which of the following accounts would increase as a result of this transaction?

Question

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The labor expense will be recorded as a liability under Accounts Payable since Hamilton Lawn Service promised to pay the labor agency within 30 days. None of the other options are applicable in this transaction as cash has not been received or paid, there is no account receivable created, and owner's capital is not affected.

Hamilton Lawn Service Incurred $500 as Labor Expense and Promised