When a company receives a utility bill but will not pay it right away, it should
A)debit Utilities Expense and credit Accounts Receivable.
B)debit Utilities Expense and credit Accounts Payable.
C)debit Accounts Payable and credit Utilities Expense.
D)make no entry until the bill is paid.

Question

Quizplus · Accepted Answer

When a company receives a utility bill but does not pay it immediately, it should record the expense and the obligation to pay. This is done by debiting Utilities Expense (to recognize the expense) and crediting Accounts Payable (to recognize the liability).

When a Company Receives a Utility Bill but Will Not