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?

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Originally Posted by Ganjafarmer420

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.

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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