A utility bill is received for expenses incurred.It will be paid in the following accounting period.Which of the following would be TRUE as a result of the receipt of the utility bill?

Question

Quizplus · Accepted Answer

When a utility bill is received for expenses incurred but not yet paid, it is recognized as an expense in the current period, which decreases net income. Since net income is a component of owner's equity, a decrease in net income results in a decrease in owner's equity.

A Utility Bill Is Received for Expenses Incurred