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?
A) February
B) January
C) March
D) No expense should be recorded.

Question

Quizplus · Accepted Answer

The expense should be recognized in January, the month in which the electricity was used, according to the matching principle in accounting.

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