Sorrento Ski Company received a utility bill in December and recorded a liability at that time. When the bill is paid in January, the payment

Name: Sorrento Ski Company received a utility bill in December and recorded a liability at that time. When the bill is paid in January, the payment
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Question

Quizplus · Accepted Answer

When the utility bill is paid in January, it decreases liabilities and assets (cash), but it does not affect expenses because the expense was already recorded in December when the liability was recognized.

Sorrento Ski Company Received a Utility Bill in December and Recorded