Question

Cash was paid by Janer's Cleaning Service to creditors on account. Which of the following entries for Janer's Cleaning Service records this transaction?

a.Accounts Payable, debit; Cash, credit
b.Cash, debit; Common Stock, credit
c.Accounts Receivable, debit; Cash, credit
d.Accounts Payable, debit; Account Receivable, credit

Answer 1

The correct journal entry for Janer's Cleaning Service paying creditors is a debit to Accounts Payable and a credit to Cash, showing a decrease in liabilities and assets.

Step-by-step explanation:

When Janer's Cleaning Service pays creditors on account, it signifies that the company is reducing its accounts payable, which is a liability. The correct journal entry to record this transaction would be a debit to Accounts Payable and a credit to Cash. This reflects the decrease in liabilities (Accounts Payable) and the decrease in assets (Cash) as the payment is made. Therefore, the correct answer to the question is Accounts Payable, debit; Cash, credit.