Bailey's received its electric bill for December on December 31 but did not pay nor record it in the general journal. This resulted in

Question

Quizplus · Accepted Answer

Not recording an expense when it is incurred (in this case, the electric bill) results in not recognizing the expense in the financial statements for that period. This leads to overstated net income because expenses decrease net income, and if an expense is not recorded, net income will not be reduced as it should be.

Bailey's Received Its Electric Bill for December on December 31