A company does not need to record the receipt of a bill for utilities used during this year if they will not pay for it until next year.

Question

Quizplus · Accepted Answer

According to the accrual accounting method, expenses should be recorded when they are incurred, not when they are paid. Therefore, the receipt of a bill for utilities used during a year should be recorded as an expense in that year, regardless of when it will be paid.

A Company Does Not Need to Record the Receipt of a Bill