When a company purchases an asset but only pays for a portion of it and owes the remainder,which of the following is true?
A)The asset is debited for the amount paid plus the amount owed.
B)The asset is debited for the amount paid.The amount owed will be debited to the asset once paid.
C)The asset is credited for the amount paid plus the amount owed.
D)The asset is credited for the amount paid.The amount owed will be debited to the asset once paid.

Question

Quizplus · Accepted Answer

A businesses typically buy goods or services from others on credit,by promising to pay within 30 days of the purchase.Accounts Payable represents the amount owed to suppliers for prior credit purchases (on account).In this transaction,the asset account,which increases,would be debited and Accounts Payable,a liability account,which also increases,would be credited.

When a Company Purchases an Asset but Only Pays for a Portion