Online Service received its telephone bill for January, but is not going to pay the bill until February. What adjustment is needed to record the receipt of the bill?

Question

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The receipt of the telephone bill but delay in payment means that the expense needs to be recorded for the month of January, but payment will not be made until February. Therefore, the account to be debited is Telephone Expense, and the account to be credited is Accounts Payable, indicating that the business owes the amount to the phone company. Choice A and D would be incorrect as they do not reflect that the payment has not yet been made. Choice B would also be incorrect as it would only be used if the bill had been paid immediately upon receipt.

Online Service Received Its Telephone Bill for January, but Is