On October 27,Able Graphics received a $400 utility bill for the current month's electricity.It is not due until the end of the next month which is when the bill will be paid.Which of the following general journal entries will Able Graphics make on October 27 to record this transaction?
A) $\begin{array}{|l|r|r|}
\hline \text { Utilities Expense } & 400 & \
\hline \text { Cash } & & 400 \
\hline
\end{array}$
B) $\begin{array}{|l|r|r|}
\hline \text { Cash } & 400 & \
\hline \text { Utilities Expense } & & 400 \
\hline
\end{array}$
C) $\begin{array}{|l|r|r|}
\hline \text { Utilities Expense } & 400 & \
\hline \text { Accounts Payable } & & 400 \
\hline
\end{array}$
D) $\begin{array}{|l|r|r|}
\hline \text { Accounts Payable } & 400 & \
\hline \text { Utilities Expense } & & 400 \
\hline
\end{array}$
E) $\begin{array}{|l|l|l|}
\hline \text { No joumal entry is required } & \quad&\quad\
\hline& \quad&\quad\\hline
\end{array}$

Question

Quizplus · Accepted Answer

Since the bill is received but not paid until the next month, it is recorded as an expense (Utilities Expense) and a liability (Accounts Payable) at the time of receipt.

On October 27,Able Graphics Received a $400 Utility Bill for the Current