When an expense is debited, which of the following accounts is most likely to be credited?

• A. Equipment
• B. Accounts Receivable
• C. Cash
• D. Revenue

Answer: (C)

Verified step by step guidance

1. Understand the nature of the transaction: When an expense is incurred, it typically represents a cost or outflow of resources. Expenses are recorded as debits because they reduce equity in the accounting equation.
2. Identify the account that is most likely credited: In double-entry accounting, every debit must have a corresponding credit. The account credited will represent the source of funds or the reduction in an asset used to pay for the expense.
3. Analyze the options provided: Equipment is an asset account and is unlikely to be credited for an expense unless the expense involves depreciation or disposal of equipment. Accounts Receivable is an asset account and is not typically credited for expenses. Revenue is a credit account but is unrelated to expenses in this context.
4. Focus on Cash: Cash is the most likely account to be credited when an expense is paid, as it represents the outflow of money used to settle the expense.
5. Conclude the reasoning: When an expense is debited, the corresponding credit is most likely to the Cash account, as this reflects the payment of the expense in most scenarios.