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

question 19

Multiple Choice

J. Brown Consulting immediately 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) \(\begin{array} { | l | r | r | }
• \hline \text { Utilities Experise } & 500 \\
• \hline \text { Cash } & & 500 \\
• \hline
• \end{array}\)
• B) \(\begin{array} { | l | r | r | }
• \hline \text { Cash } & 500 \\
• \hline \text { Utilities Expense } & & 500 \\
• \hline
• \end{array}\)
• C) \(\begin{array}{|l|r|r|}
• \hline \text { Cash } & 500 & \\
• \hline \text { Accounts Payable } & & 500 \\
• \hline
• \end{array}\)
• D) \(\begin{array} { | l | r | r | }
• \hline \text { Utilities Experise } & 500 \\
• \hline \text { Accourts Payable } & & 500 \\
• \hline
• \end{array}\)
• E) \(\begin{array}{|l|r|r|}
• \hline \text { Prepaid Utilities } & 500 & \\
• \hline \text { Accounts Payable } & & 500 \\
• \hline
• \end{array}\)

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Definitions:

Activity-based Costing

A method of allocating overhead and indirect costs based on each product's or service's actual consumption of resources.

Cost Pools

A method used in cost accounting to group collected costs, which simplifies allocating costs to different products, services, or departments.

Activity Rates

Predetermined rates used in activity-based costing to allocate costs to products or services based on their consumption of activities.

Direct Labor Hours

The total hours worked by employees directly involved in the manufacturing process or providing services, used in calculating production costs or rates.