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On September 15, a business receives a bill for $350 for electricity used during the month of August
On September 15, a business receives a bill for $350 for electricity used during the month of August. The business pays the electric bill on October 1. When should the business record Utilties Expense under the accrual method of accounting? When should it record Utilities Expense under the cash basis of accounting? Multiple Choice Accrual - September 15; Cash - September 15 o Accrual - September 15; Cash - October 1 Accrual - August 31; Cash - August 31 O O Cannot be determined from the information given
Accrual - September 15; Cash - September 15 Accrual - September 15; Cash - October 1 Accrual - August 31; Cash - August 31 Cannot be determined from the information given a Accrual - October 1; Cash - August 31 O O Accrual - August 31; Cash - October 1
Expert Solution
Answer- Accrual -September 15,Cash-October 1
Explanation
In accrual method we record expense when it is due or invoice issued ,Therefore on Sept 15 we recorded the expense.
In Cash basis we record the expense when it is paid,therefore on oct 1 we recorded the expense
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