Amalia Company received its utility bill for the current period of $700 and immediately paid it. Its journal entry to record this transaction includes a a. Credit to Utility Expense for $700. b. Debit to Utility Expense for $700. c. Debit to Accounts Payable for $700. d. Debit to Cash for $700. e. Credit to Common Stock for $700.

Question

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Answer 1

Textbook Question

Chapter 2, Problem 1MCQ

Amalia Company received its utility bill for the current period of $700 and immediately paid it. Its journal entry to record this transaction includes a

a. Credit to Utility Expense for $700.
b. Debit to Utility Expense for $700.
c. Debit to Accounts Payable for $700.
d. Debit to Cash for $700.
e. Credit to Common Stock for $700.

Expert Solution & Answer

To determine

Identify the correct option for the given transaction.

Answer to Problem 1MCQ

b. Debit to utility expenses for $700.

Explanation of Solution

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Prepare a journal entry to record the payment incurred on utility expenses for the current period as follows:

Date	Account Title and Explanation	Post Ref	Debit ($)	Credit ($)
	Utility expenses		700
	Cash			700
	(To record the payment incurred on utility expenses.)

Table (1)

A Utility expense is an expense account and it is increased by $700. Expenses are the component of stockholder’s Equity and it decreases the value of equity. Therefore, debit utility expenses account with $700.
Cash is an asset, and it is decreased by $700. Therefore, credit cash with $700.

From the above explanation, it is clear that Option (a), (c), (d) and (e) are incorrect and only option (b) is correct.

Conclusion

Therefore, the correct option is Option (b).

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Answer 2

Textbook Question

Chapter 2, Problem 1MCQ

Amalia Company received its utility bill for the current period of $700 and immediately paid it. Its journal entry to record this transaction includes a

a. Credit to Utility Expense for $700.
b. Debit to Utility Expense for $700.
c. Debit to Accounts Payable for $700.
d. Debit to Cash for $700.
e. Credit to Common Stock for $700.

Expert Solution & Answer

To determine

Identify the correct option for the given transaction.

Answer to Problem 1MCQ

b. Debit to utility expenses for $700.

Explanation of Solution

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Prepare a journal entry to record the payment incurred on utility expenses for the current period as follows:

Date	Account Title and Explanation	Post Ref	Debit ($)	Credit ($)
	Utility expenses		700
	Cash			700
	(To record the payment incurred on utility expenses.)

Table (1)

A Utility expense is an expense account and it is increased by $700. Expenses are the component of stockholder’s Equity and it decreases the value of equity. Therefore, debit utility expenses account with $700.
Cash is an asset, and it is decreased by $700. Therefore, credit cash with $700.

From the above explanation, it is clear that Option (a), (c), (d) and (e) are incorrect and only option (b) is correct.

Conclusion

Therefore, the correct option is Option (b).

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Answer 3

Textbook Question

Chapter 2, Problem 1MCQ

Amalia Company received its utility bill for the current period of $700 and immediately paid it. Its journal entry to record this transaction includes a

a. Credit to Utility Expense for $700.
b. Debit to Utility Expense for $700.
c. Debit to Accounts Payable for $700.
d. Debit to Cash for $700.
e. Credit to Common Stock for $700.

Expert Solution & Answer

To determine

Identify the correct option for the given transaction.

Answer to Problem 1MCQ

b. Debit to utility expenses for $700.

Explanation of Solution

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Prepare a journal entry to record the payment incurred on utility expenses for the current period as follows:

Date	Account Title and Explanation	Post Ref	Debit ($)	Credit ($)
	Utility expenses		700
	Cash			700
	(To record the payment incurred on utility expenses.)

Table (1)

A Utility expense is an expense account and it is increased by $700. Expenses are the component of stockholder’s Equity and it decreases the value of equity. Therefore, debit utility expenses account with $700.
Cash is an asset, and it is decreased by $700. Therefore, credit cash with $700.

From the above explanation, it is clear that Option (a), (c), (d) and (e) are incorrect and only option (b) is correct.

Conclusion

Therefore, the correct option is Option (b).

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Answer 4

Textbook Question

Chapter 2, Problem 1MCQ

Amalia Company received its utility bill for the current period of $700 and immediately paid it. Its journal entry to record this transaction includes a

a. Credit to Utility Expense for $700.
b. Debit to Utility Expense for $700.
c. Debit to Accounts Payable for $700.
d. Debit to Cash for $700.
e. Credit to Common Stock for $700.

Expert Solution & Answer

To determine

Identify the correct option for the given transaction.

Answer to Problem 1MCQ

b. Debit to utility expenses for $700.

Explanation of Solution

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Prepare a journal entry to record the payment incurred on utility expenses for the current period as follows:

Date	Account Title and Explanation	Post Ref	Debit ($)	Credit ($)
	Utility expenses		700
	Cash			700
	(To record the payment incurred on utility expenses.)

Table (1)

A Utility expense is an expense account and it is increased by $700. Expenses are the component of stockholder’s Equity and it decreases the value of equity. Therefore, debit utility expenses account with $700.
Cash is an asset, and it is decreased by $700. Therefore, credit cash with $700.

From the above explanation, it is clear that Option (a), (c), (d) and (e) are incorrect and only option (b) is correct.

Conclusion

Therefore, the correct option is Option (b).

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Identify the correct option for the given transaction.

Answer to Problem 1MCQ

b. Debit to utility expenses for $700.

Explanation of Solution

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Prepare a journal entry to record the payment incurred on utility expenses for the current period as follows:

Date	Account Title and Explanation	Post Ref	Debit ($)	Credit ($)
	Utility expenses		700
	Cash			700
	(To record the payment incurred on utility expenses.)

Table (1)

A Utility expense is an expense account and it is increased by $700. Expenses are the component of stockholder’s Equity and it decreases the value of equity. Therefore, debit utility expenses account with $700.
Cash is an asset, and it is decreased by $700. Therefore, credit cash with $700.

From the above explanation, it is clear that Option (a), (c), (d) and (e) are incorrect and only option (b) is correct.

Conclusion

Therefore, the correct option is Option (b).

Answer 8

Expert Solution & Answer

To determine

Identify the correct option for the given transaction.

Answer to Problem 1MCQ

b. Debit to utility expenses for $700.

Explanation of Solution

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Prepare a journal entry to record the payment incurred on utility expenses for the current period as follows:

Date	Account Title and Explanation	Post Ref	Debit ($)	Credit ($)
	Utility expenses		700
	Cash			700
	(To record the payment incurred on utility expenses.)

Table (1)

A Utility expense is an expense account and it is increased by $700. Expenses are the component of stockholder’s Equity and it decreases the value of equity. Therefore, debit utility expenses account with $700.
Cash is an asset, and it is decreased by $700. Therefore, credit cash with $700.

From the above explanation, it is clear that Option (a), (c), (d) and (e) are incorrect and only option (b) is correct.

Conclusion

Therefore, the correct option is Option (b).

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Identify the correct option for the given transaction.

Answer 12

Answer to Problem 1MCQ

b. Debit to utility expenses for $700.

Answer 13

Explanation of Solution

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Prepare a journal entry to record the payment incurred on utility expenses for the current period as follows:

Date	Account Title and Explanation	Post Ref	Debit ($)	Credit ($)
	Utility expenses		700
	Cash			700
	(To record the payment incurred on utility expenses.)

Table (1)

A Utility expense is an expense account and it is increased by $700. Expenses are the component of stockholder’s Equity and it decreases the value of equity. Therefore, debit utility expenses account with $700.
Cash is an asset, and it is decreased by $700. Therefore, credit cash with $700.

From the above explanation, it is clear that Option (a), (c), (d) and (e) are incorrect and only option (b) is correct.