Question

Able Graphics received a $780 utility bill for the current month's electricity. It is not due until the end of the next month which is when they intend to pay it. Which of the following general journal entries will Able Graphics make to record this transaction?

A

Utilities Payable 780
Cash 780
B

Utilities Expense 780
Accounts Payable 780
C

Utilities Expense 780
Cash 780
D

Cash 780
Utilities Expense 780
E

Accounts Payable 780
Utilities Expense 780

Answer 1

Answer:

B.  Utilities Expense 780

Accounts Payable 780

Explanation:

The journal entry to record this transaction is shown below:

Utilities Expense A/c Dr $780

          To Accounts Payable A/c $780

(Being the utility expense is recorded)

Since the utility is an expense account so it will be debited while the bill is not paid yet will become the liability so liability account is increased so we credited it