Question

"Payment to Vendors" is represented by what type of entry to what account?

a. Debit to Accounts Payable
b. Credit to Accounts Payable
c. Debit to Prepaid Expenses
d. Credit to Prepaid Expenses

Answer 1

The correct answer is b. Credit to Accounts Payable.

When making payments to vendors, it is typically recorded as a credit entry to the Accounts Payable account. This indicates a decrease in the liability owed to the vendors. On the vendor's side, they would record a corresponding debit entry to their Accounts Receivable or Cash account, depending on how the payment is received.