{"id":201019,"date":"2025-03-14T09:25:47","date_gmt":"2025-03-14T09:25:47","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=201019"},"modified":"2025-03-14T09:25:48","modified_gmt":"2025-03-14T09:25:48","slug":"a-journal-entry-to-record-a-payment-on-account-will-include-a-2","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/03\/14\/a-journal-entry-to-record-a-payment-on-account-will-include-a-2\/","title":{"rendered":"A journal entry to record a payment on account will include a"},"content":{"rendered":"\n<p>A journal entry to record a payment on account will include a<\/p>\n\n\n\n<p>a. debit to accounts receivable.<br>b. credit to accounts receivable.<br>c. debit to accounts payable.<br>d. credit to accounts payable.<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-6-color\"><strong>The correct answer and explanation is :<\/strong><\/mark><\/p>\n\n\n\n<p>The correct answer is <strong>d. credit to accounts payable<\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Explanation:<\/h3>\n\n\n\n<p>When a company makes a payment on account, it is essentially settling an outstanding liability. In accounting, &#8220;on account&#8221; typically refers to amounts owed, meaning the company is paying off an amount that it owes to creditors or vendors. This is a transaction involving accounts payable, which represents the money the company owes to suppliers for goods or services received but not yet paid for.<\/p>\n\n\n\n<p>Here\u2019s how the journal entry works:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Accounts Payable<\/strong>: This account reflects the company\u2019s obligations to its creditors. When the company makes a payment, it reduces the amount of liability owed, so <strong>Accounts Payable<\/strong> will be <strong>credited<\/strong> (decreased).<\/li>\n\n\n\n<li><strong>Cash<\/strong>: Cash is used to make the payment. Cash is an asset, and when a payment is made, the company\u2019s cash balance decreases. Therefore, <strong>Cash<\/strong> will be <strong>debited<\/strong> (decreased).<\/li>\n<\/ol>\n\n\n\n<h3 class=\"wp-block-heading\">Journal Entry:<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Debit<\/strong>: Cash (for the amount paid)<\/li>\n\n\n\n<li><strong>Credit<\/strong>: Accounts Payable (for the amount paid)<\/li>\n<\/ul>\n\n\n\n<p>This transaction ensures that the accounts payable balance is reduced by the payment amount, and the cash account reflects the outflow of funds.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Why the other options are incorrect:<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>a. Debit to accounts receivable<\/strong>: Accounts receivable is used when a company is receiving payment from customers for goods or services sold on credit. This would not apply to payments made to creditors.<\/li>\n\n\n\n<li><strong>b. Credit to accounts receivable<\/strong>: A credit to accounts receivable would reduce the amount of money owed by customers. This situation is unrelated to payments made to creditors, which is what &#8220;on account&#8221; refers to in this context.<\/li>\n\n\n\n<li><strong>c. Debit to accounts payable<\/strong>: This would increase the liability (if the company owed more), but when making a payment, the liability is being reduced, so accounts payable should be credited.<\/li>\n<\/ul>\n\n\n\n<p>Therefore, the correct accounting treatment for a payment on account is a <strong>credit to accounts payable<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A journal entry to record a payment on account will include a a. debit to accounts receivable.b. credit to accounts receivable.c. debit to accounts payable.d. credit to accounts payable. The correct answer and explanation is : The correct answer is d. credit to accounts payable. Explanation: When a company makes a payment on account, it [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-201019","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/201019","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=201019"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/201019\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=201019"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=201019"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=201019"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}