Expenses do not have to be paid in cash at the time they are incurred. When payment is made on the later date, the liability accounts payable account will decrease and the asset

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When a payment is made on a later date for expenses previously incurred, the cash account decreases because cash is used to settle the liability (accounts payable), thus reducing the amount of cash the company has on hand.

Expenses Do Not Have to Be Paid in Cash at the Time