Question

Alicia Tax Services paid $680 to settle an account payable. Which of the following general journal entries will Alicia Tax Services make to record this transaction?

1) Debit Accounts Payable $680, Credit Cash $680
2) Debit Cash $680, Credit Accounts Payable $680
3) Debit Accounts Receivable $680, Credit Cash $680
4) Debit Cash $680, Credit Accounts Receivable $680

Answer 1

Alicia Tax Services will make a journal entry with a debit to Accounts Payable for $680 and a credit to Cash for $680.

Step-by-step explanation:

The correct general journal entry that Alicia Tax Services will make to record the transaction of paying $680 to settle an account payable is:

Debit Accounts Payable $680

Credit Cash $680

This entry reflects the decrease in the Accounts Payable account by $680 and the decrease in the Cash account by the same amount.