On October 27,Able Graphics Received a $400 Utility Bill for the Current

question 56

Multiple Choice

On October 27,Able Graphics received a $400 utility bill for the current month's electricity.It is not due until the end of the next month which is when the bill will be paid.Which of the following general journal entries will Able Graphics make on October 27 to record this transaction?

• A) \(\begin{array}{|l|r|r|}
• \hline \text { Utilities Expense } & 400 & \\
• \hline \text { Cash } & & 400 \\
• \hline
• \end{array}\)
• B) \(\begin{array}{|l|r|r|}
• \hline \text { Cash } & 400 & \\
• \hline \text { Utilities Expense } & & 400 \\
• \hline
• \end{array}\)
• C) \(\begin{array}{|l|r|r|}
• \hline \text { Utilities Expense } & 400 & \\
• \hline \text { Accounts Payable } & & 400 \\
• \hline
• \end{array}\)
• D) \(\begin{array}{|l|r|r|}
• \hline \text { Accounts Payable } & 400 & \\
• \hline \text { Utilities Expense } & & 400 \\
• \hline
• \end{array}\)
• E) \(\begin{array}{|l|l|l|}
• \hline \text { No joumal entry is required } & \quad&\quad\\
• \hline& \quad&\quad\\\hline
• \end{array}\)

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Definitions:

Tax Incidence

The analysis of the effect of a particular tax on the distribution of economic welfare.

Specific Excise Taxes

Taxes imposed on a particular good or service, charged by quantity rather than value, such as per gallon or per pack.

Consumer Goods

Products that are sold directly to consumers for their personal or household use.

Sales Taxes

Levies that are imposed on the sale of goods and services, which are typically calculated as a percentage of the retail sales price.