A business paid #80,000 for shop rent using cash. Which account will be credited?

Question

ScanSolve AI Tutor · Accepted Answer

When a business pays for an expense like rent using cash, two accounts are affected:

Rent Account: Rent is an expense. Expenses increase with a debit. Therefore, the Rent Account will be debited.
Cash Account: Cash is an asset. When cash is paid out, the asset decreases. Assets decrease with a credit. Therefore, the Cash Account will be credited.

The question asks which account will be credited.

The correct option is B.

Step 1: Identify the nature of the transaction. The business is paying an expense (rent) using an asset (cash).
Step 2: Determine the accounts involved. The accounts are Rent Expense and Cash.
Step 3: Apply the rules of debit and credit.
- Rent Expense is an expense account, and expenses increase with a debit. So, Rent Account is debited.
- Cash is an asset account, and assets decrease with a credit. So, Cash Account is credited.

The account that will be credited is the Cash Account.

The final answer is $\boxed{\text{B. Cash Account}}$

Answer