Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 21 - No. 49)
What is the correct accounting entry for an electricity bill paid via direct debit?
Debit Bank, Credit Utilities Expense
Debit Utilities Expense, Credit Bank
Debit Cash, Credit Utilities Expense
Debit Utilities Expense, Credit Cash
Explanation
Utilities expense increases (debit), reducing the bank balance (credit).
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