What Would Be the Effect on December's Statement of Earnings

question 74

Multiple Choice

What would be the effect on December's statement of earnings of a utility bill received on December 27, 2013 but which will not be paid until January 10, 2014?

• A) Profit will be decreased when we pay the bill in January
• B) No expense will be recognized until the bill is paid in January
• C) We would cause an increase in profit by recording the expense in December
• D) Recording the expense in December when it is incurred will increase expenses

---

Definitions:

Codes of Ethics

Guidelines designed to help professionals conduct business honestly and with integrity, usually set by professional organizations or individual companies.