What happens to the Checking account balance when a bill is paid?

• A. The balance increases
• B. The balance remains the same
• C. The balance is credited/decreased
• D. The balance is debited/increased

Answer: (C)

When a bill is paid from a checking account, the balance is credited or decreased because the act of paying a bill represents an outflow of funds from that account. This transaction reduces the overall amount of money available in the checking account, reflecting the expenditure. In bookkeeping terms, when money is paid out, it is considered a debit to the expense account involved and a corresponding credit to the checking account, thereby decreasing its balance. This aligns with the standard accounting practice that recognizes expenses as deductions from equity, and thus directly impacts the cash available in the checking account.