Dr. Peabody recorded an $82 telephone bill that he will pay within thirty days. Which of the following statements is correct? A. Telephone expense is debited $82; accounts payable is credited $82.
B. Telephone expense is debited $82; cash is credited $82.
C. Telephone expense is debited $82; accounts payable is debited $82.
D. Telephone expense is credited $82; accounts payable is debited $82.

A. Telephone expense is debited $82; accounts payable is credited $82.

Explanation:

Mr. Peabody has incurred a debt of $82 on telephone expenses. His expenses have increased by $82, and his debts(liabilities) have also increased by $82.

An increase in expenses is recorded by debiting the relevant expense account. Mr. Peabody will debit the telephone expense account by $82.

Liabilities have increased by $82. An increase in liabilities is recorded by crediting the liabilities account. Mr. Peabody will complete this transaction by crediting the liabilities account by $82.

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