What entries should be made in the extended trial balance in respect of an accrual for electricity charges?
A) Debit the income statement and credit the asset account
B) Debit the income statement and credit the current liabilities
C) Credit the income statement and debit the asset account
D) Credit the income statement and debit the current liabilities

Question

Quizplus · Accepted Answer

Accruals for expenses like electricity charges are recorded by debiting the expense account (which affects the income statement) to recognize the expense in the period it was incurred, and crediting a liability account (current liabilities) to recognize the obligation to pay in the future.

What Entries Should Be Made in the Extended Trial Balance