Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 13 - No. 26)
What is the correct journal entry to record a debit for electricity expense?
Debit Electricity expense, Credit Cash
Debit Cash, Credit Electricity Expense
Debit Electricity expense, Credit Accrued Electricity Payable
Debit Electricity expense, Credit Prepaid Electricity.
Explanation
To record electricity expense the correct journal entry is Debit Electricity expense, Credit Accrued Electricity Payable (as the expense has been incurred, and not yet paid).
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