On which date did Lou rent equipment paid by credit card?

On which date did Lou rent equipment paid by credit card?

• A. July 24
• B. July 4
• C. July 17
• D. July 7

Answer: (D)

When you use a credit card for a rental, the expense is recognized on the date the rental occurs, not on the date the card bill is paid. Recording the transaction then creates a liability to the credit card issuer for that amount. So the correct date is the day Lou rented the equipment—the moment the obligation arose. The later date would only reflect payment timing, not when the rental was incurred. If the rental happened on July 7, that is the date the expense should be recorded.

When you use a credit card for a rental, the expense is recognized on the date the rental occurs, not on the date the card bill is paid. Recording the transaction then creates a liability to the credit card issuer for that amount. So the correct date is the day Lou rented the equipment—the moment the obligation arose. The later date would only reflect payment timing, not when the rental was incurred. If the rental happened on July 7, that is the date the expense should be recorded.