💼 Pre-MBA Exam Prep

A journal entry that debits an expense and credits a liability is recording:

A Cash payment
B An accrued expense — expense incurred but not yet paid
C Revenue earned
D Asset purchase

✓ Correct Answer: Option B

Accrued expense: the company has incurred an obligation (expense recognized) but hasn't paid yet (liability increases). Common examples: accrued salaries, interest payable.

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