J Brown Consulting Paid $500 Cash for Utilities for the Current

question 52

Multiple Choice

J. Brown Consulting paid $500 cash for utilities for the current month. Given the choices below, determine the general journal entry that J. Brown Consulting will make to record this transaction.

• A)\[\begin{array} { | l | r | r | }
• \hline \text { Utilities Expense } & 500 & \\
• \hline \text { Cash } & & 500 \\
• \hline
• \end{array}\]
• B)\[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 500 & \\
• \hline \text { Utilities Expense } & & 500 \\
• \hline \hline
• \end{array}\]
• C)\[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 500 & \\
• \hline \text { Accounts Payable } & & 500 \\
• \hline
• \end{array}\]
• D)\[\begin{array} { | l | r | r | }
• \hline \text { Utilities Expense } & 500 & \\
• \hline \text { Accounts Payable } & & 500 \\
• \hline
• \end{array}\]
• E)\[\begin{array} { | l | r | r | }
• \hline \text { Prepaid Utilities } & 500 & \\
• \hline \text { Accounts Payable } & & 500 \\
• \hline
• \end{array}\]

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Definitions:

Direct Fixed Expenses

Costs that are directly associated with a specific department or segment of a business and do not vary with the level of production or sales.

Cash Flow

The aggregate money movement into and out of a company, notably impacting its cash on hand.

Excess Capacity

The availability of more production capacity within a business than is currently needed to meet demand.

Special Order

An order for a product or service that is outside the company's normal scope of work, often requiring a unique set of costs and pricing.