On February 15, a local business receives an invoice for electricity used in the month of January and pays it on March 1. In which month should the business recognize the expense?

Question

Quizplus · Accepted Answer

The expense should be recognized in the month in which the electricity was used, which is January in this case. The fact that the invoice was received and paid in February and March respectively, does not change the timing of recognizing the expense. Therefore, option B is the correct answer.

On February 15, a Local Business Receives an Invoice for Electricity