How do you record an expense paid with a company credit card and ensure it posts to the correct liability and expense accounts?

• A. Create an Expense or Bill with Payment Method Credit Card, or pay a Bill with a credit card; ensure the Credit Card Liability account is updated and the expense posts to the correct expense account.
• B. Record a Deposit to the credit card liability.
• C. Pay the Bill with a check.
• D. Enter a Journal Entry to adjust cash accounts.

Answer: (A)

When you incur an expense charged to a company credit card, you want two things to happen: the expense is recorded in the right category, and the amount you owe to the card issuer increases. In QuickBooks, you do this by creating the expense (or a bill) and choosing the payment method as Credit Card, or by paying the bill with the credit card. This links the purchase to the appropriate expense account and updates the Credit Card Liability balance, so your books show both the correct expense and the amount owed on the card. Later, when you pay the credit card bill, you’ll reduce that liability accordingly.

Depositing to the credit card liability would simply increase the liability without recording the actual expense. Paying the bill with a check typically affects your bank cash rather than properly capturing the card transaction and its impact on the card liability, unless you’re completing a separate workflow for the card. A journal entry can adjust accounts but bypasses the standard flow and is more error-prone for everyday expenses.