PRC-1 · Chapter 4 · Question 99 of 100
Which of the following describes the most accurate sequence of creating a year-end adjustment for an unrecorded utility bill?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Increase expense, increase current liability.
Explanation
An unrecorded utility bill is an accrued expense. The adjustment requires debiting (increasing) the utility expense account and crediting (increasing) the accrued utility liability account.
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