Able Graphics Received a $400 Utility Bill for the Current $\begin{array} { | c | r | r | } \hline \text { Utilities Expense } & 400 & \\\hline \text { Cash } & & 400 \\\hline\end{array}$

question 168

Multiple Choice

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 they intend to pay it. Which of the following general journal entries will Able Graphics make to record this transaction?

• A) \(\begin{array} { | c | r | r | }
• \hline \text { Utilities Expense } & 400 & \\
• \hline \text { Cash } & & 400 \\
• \hline
• \end{array}\)
• B) \(\begin{array}{|c|r|r|}
• \hline \text { Cash } & 400 & \\
• \hline \text { Utilities Expense } & & 400 \\
• \hline
• \end{array}\)
• C) \(\begin{array} { | c | r | r | }
• \hline \text { Utilities Expense } & 400 & \\
• \hline \text { Accounts Payable } & & 400 \\
• \hline
• \end{array}\)
• D) \(\begin{array} { | c | r | r | }
• \hline \text { Accounts Payable } & 400 & \\
• \hline \text { Utilities Expense } & & 400 \\
• \hline
• \end{array}\)
• E) \(\begin{array} { | c | r | r | }
• \hline \text { Utilities Payable } & 400 & \\
• \hline \text { Cash } & & 400 \\
• \hline
• \end{array}\)

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Definitions:

Marginal Propensity

The portion of additional income that an individual spends on consuming goods and services, as opposed to saving.

Multiplier

An economic factor that quantifies the impact of a change in investment, government spending, or other economic variables on the overall economy, often leading to a multiple increase in income or output.

Liquidity Preference Theory

A theory suggesting that people prefer to hold their wealth in liquid form for ease of transactions and as a precaution against uncertainty, influencing interest rates.

Demand for Money

The need or desire to hold money as opposed to investing or spending it, influenced by factors such as interest rates and economic stability.