A company received a bill of $2,110 for utilities used in the current month.The journal entry to record this event:
A)will include a debit to Accounts Receivable for $2,110.
B)will include a credit to Accounts Payable for $2,110.
C)will include a credit to Utilities Expense.
D)is not required;no journal entry should be prepared until the utilities bill is paid.

Question

Quizplus · Accepted Answer

Expenses are recorded when they are incurred.The obligation to the utility company should be recorded as a liability.The entry to record this transaction will include a debit to Utilities Expense and a credit to Accounts Payable for $2,110.

A Company Received a Bill of $2,110 for Utilities Used