When a Company Receives a Utility Bill but Will Not

question 9

Multiple Choice

When a company receives a utility bill but will not pay it right away, it should

• A)debit Utilities Expense and credit Accounts Receivable.
• B)debit Utilities Expense and credit Accounts Payable.
• C)debit Accounts Payable and credit Utilities Expense.
• D)make no entry until the bill is paid.

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Definitions:

Stock Index

A measurement of a section of the stock market calculated from the prices of selected stocks, representing a specific market or sector.

Futures Contracts

Financial contracts obligating the buyer to purchase an asset or the seller to sell an asset, such as a physical commodity or a financial instrument, at a predetermined future date and price.

Electronic Networks

Systems or platforms that facilitate the trading of financial instruments, such as stocks and currencies, digitally and without a physical trading floor.

Trading Pits

Physical locations on the floor of some exchanges where traders use open outcry and hand signals to buy and sell commodities or financial instruments.