Seconds Best Retail Store receives and immediately pays a $3,500 utility bill from the City Gas & Electric Company.The entry by the City Gas & Electric Company to record receipt of this payment would include a:
A)credit to accounts payable.
B)credit to utilities expense.
C)debit to utilities revenue.
D)debit to cash.

Question

Quizplus · Accepted Answer

The City Gas & Electric Company would debit Cash, as they received payment from Seconds Best Retail Store. There would not be a credit to accounts payable, as Seconds Best Retail Store paid their bill; there would not be a credit to utilities expense, as this is a transaction between the City Gas & Electric Company and Seconds Best Retail Store and does not affect the City Gas & Electric Company's expenses; and there would not be a debit to utilities revenue, as this is not a transaction that generates revenue.

Seconds Best Retail Store Receives and Immediately Pays a $3,500