Asked by Riley Ponder on Mar 10, 2024
Verified
Online Service received its telephone bill for January, but is not going to pay the bill until February. What adjustment is needed to record the transaction?
A) Debit Telephone Expense; credit Cash
B) Debit Accounts Payable; credit Telephone Expense
C) Debit Telephone Expense; credit Accounts Payable
D) Debit Accounts Payable; credit Cash
A) Debit Telephone Expense; credit Cash
B) Debit Accounts Payable; credit Telephone Expense
C) Debit Telephone Expense; credit Accounts Payable
D) Debit Accounts Payable; credit Cash
Telephone Bill
A periodic charge for the use of telephone services, often including the cost of calls, subscription fees, and taxes.
Accounts Payable
Money owed by a company to its creditors or suppliers for goods and services received but not yet paid for.
- Absorb the key principles and strategies involved in the adjustment of entries for accrued revenues and expenses.
Verified Answer
BM
brighty maged
Mar 10, 2024
Final Answer :
C
Explanation :
The correct adjustment is to debit Telephone Expense to recognize the expense in January when it was incurred, and credit Accounts Payable to record the liability that will be paid in February. This follows the accrual basis of accounting, where expenses are recognized when they are incurred, not when they are paid.
Learning Objectives
- Absorb the key principles and strategies involved in the adjustment of entries for accrued revenues and expenses.