Answer:
Debit: Utilities Expense
Credit: Utilities payable
Explanation:
Answer:
Debit Utilities expense account with $500
Credit Utilities payable account with $500
Explanation:
Recognition principle of accounting which is the foundation of the accrual basis of accounting states that all revenues must be recognized in the period when they are earned and all expenses too must be recorded when they are uncured.
Based on this, the utility bill of $500 will be recorded as an expenses in May. Since the payment is postponed till June, it becomes a current liability as a payable in May until when cash is paid in June. Therefore, the adjusting entry is recorded as follows:
Debit Utilities expense account with $500
Credit Utilities payable account with $500
