A: The power bill would be classified under owner’s equity as a revenue account. You would also record an account payable under liabilities.

B: The power bill would be included in expenses in the owner’s equity section. The other account would be cash.

C: The power bill would be classified under expenses in the owner’s equity section, and an account payable would be listed under liabilities.

D: To increase expenses, you would look in assets, and to increase accounts payable, you would look in liabilities.

Where in the chart of accounts would a company look to record a power bill that it will pay for thirty days later?

A: The power bill would be classified under owner’s equity as a revenue account. You would also record an account payable under liabilities.

B: The power bill would be included in expenses in the owner’s equity section. The other account would be cash.

C: The power bill would be classified under expenses in the owner’s equity section, and an account payable would be listed under liabilities.

D: To increase expenses, you would look in assets, and to increase accounts payable, you would look in liabilities.

This requires some thought on your part since the terminology talks about equity when a simpler explanation is that it is an expense and therefore dealt with within the revenue section of the accounts. The answer is C