Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 15 - No. 32)
If a company receives a bill for electricity, what is the correct journal entry?
Debit Cash, Credit Utilities Expense
Debit Utilities Expense, Credit Cash
Debit Utilities Expense, Credit Accounts Payable
Debit Accounts Payable, Credit Utilities Expense
Explanation
The electricity expense (expense) is increased and the amount owed to the utility company (liability) is increased.
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