The journal entry to record a particular business transaction includes a credit to a liability account.This transaction is most likely also to include:
A)Issuance of new capital stock.
B)The purchase of an asset on account.
C)A cash payment.
D)A credit to Accounts Receivable.

Question

Quizplus · Accepted Answer

A credit to a liability account typically means the business has received goods or services on account (i.e. they haven't yet paid for them) which is recorded as a credit to a liability account. Therefore, the most likely accompanying transaction would be the purchase of an asset on account.

The Journal Entry to Record a Particular Business Transaction Includes