At December 31,2015,a company has received,but not paid,a utility bill for $250.The amount of utility expense for 2015 equals $250.

Question

Quizplus · Accepted Answer

The fact that the company received but did not pay the utility bill means that it is an accounts payable (liability) at the end of 2015. However, since the company incurred the expense for the utility in 2015, it should be recognized as an expense for that year, regardless of when it is paid. Therefore, the amount of utility expense for 2015 is $250.

At December 31,2015,a Company Has Received,but Not Paid,a Utility Bill