When a business pays a repair bill by check, which accounting entry best describes the payment in the vendor's records?

When a business pays a repair bill by check, which accounting entry best describes the payment in the vendor's records?

• A. A Bank Deposit
• B. An Invoice
• C. A Vendor Check
• D. A Bank Feed

Answer: (C)

When a business pays a bill with a check, the payment is recorded as the instrument used to settle the obligation. In the vendor’s records, this is captured as a vendor check—the payment method the customer used to pay the vendor. The idea is that the check represents the cash exchanged to satisfy the bill, so the vendor’s books reflect a check payment from the customer. Bank deposits describe money coming into a business’s bank account, not the payment instrument used to discharge a liability. An invoice is something you issue when you bill someone, not the act of payment. A bank feed is just an automatic import of bank transactions, not the description of how a payment was made. So, the entry in the vendor’s records is best described as a vendor check.

When a business pays a bill with a check, the payment is recorded as the instrument used to settle the obligation. In the vendor’s records, this is captured as a vendor check—the payment method the customer used to pay the vendor. The idea is that the check represents the cash exchanged to satisfy the bill, so the vendor’s books reflect a check payment from the customer.

Bank deposits describe money coming into a business’s bank account, not the payment instrument used to discharge a liability. An invoice is something you issue when you bill someone, not the act of payment. A bank feed is just an automatic import of bank transactions, not the description of how a payment was made. So, the entry in the vendor’s records is best described as a vendor check.