Carrie flew to Toronto on a business trip. The purchase price of the ticket was $679 and it was bought from a travel agency on account. The entry to record the transaction is
A) debit Accounts Payable, $679; credit Travel Expense, $679.
B) debit Capital, $679; credit Accounts Payable, $679.
C) debit Travel Expense, $679; credit Accounts Payable, $679.
D) debit Travel Expense, $679; credit Cash, $679.

Question

Quizplus · Accepted Answer

The purchase of the ticket on account means that it was not paid for with cash, so option D can be eliminated. The transaction involves an expense, so option B can also be eliminated. The correct entry is to debit Travel Expense for the cost of the ticket and credit Accounts Payable to record the amount owed to the travel agency. Therefore, the best choice is C.

Carrie Flew to Toronto on a Business Trip