What account posting rules are applied to supplier invoices?

When processing supplier invoices, the typical accounting entry involves recognizing the expense incurred through the purchase of goods or services and the liability created due to the obligation to pay the supplier. The appropriate accounting treatment is to debit the expense account (spending account) to reflect the increase in expenses, representing the cost associated with acquiring goods or services. Simultaneously, a credit is made to the Payables account to reflect the corresponding liability that arises from the promise to pay the supplier in the future.

This dual entry adheres to the double-entry accounting principle, ensuring that every financial transaction is accurately reflected in the books. By debiting the expense, you are acknowledging the increase in expenditures on the income statement, while crediting Payables indicates that the organization has a future outflow of resources that will be settled, thus properly matching the expense to the periods in which it contributes to revenue generation.

Other options do not properly match the accounts involved in the context of supplier invoices. Choices that reference cash, revenue, or retained earnings would not apply in this scenario as they do not accurately reflect the nature of supplier transactions.