Which of the following is true regarding recording an accounts payable transaction?

Question

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When a purchase is made on credit, accounts payable is increased with a credit entry (not a debit) as it represents a liability or amount owed to the vendor. When the bill is paid, accounts payable is decreased with a debit entry as it reduces the liability owed to the vendor. Option A is incorrect as it suggests a debit entry is made when the purchase is made, which is not the case for a credit purchase. Option B is incorrect as accounts payable can arise from both inventory purchases and non-inventory expenses like utilities, rent, office supplies, etc. Option C is incorrect as accounts payable does not represent a note, it is simply amounts owed to the vendors for goods or services received.

Which of the Following Is True Regarding Recording an Accounts