When a business receives an unpaid electricity account, it should:
A) debit Electricity expense and credit Accounts receivable.
B) debit Electricity expense and credit Accounts payable.
C) debit Accounts payable and credit Electricity expense.
D) make no entry until the bill is paid.

Question

Quizplus · Accepted Answer

To record the consumption of a resource without payment of cash, debit an expense (a decrease to equity) and credit a liability (Payable).

When a Business Receives an Unpaid Electricity Account, It Should