Hello,

If a company receives a utilities bill, is the bill automatically recorded as an accounts payable?

In other words, when you receive the bill, do you have to write a journal entry where you debit expenses and credit accounts payable ? Is it considered a transaction that needs to be recorded just by receiving the bill ?

A utilities bill is processed in the same way as any other invoice.

@Fidget1: I am still pretty new to accounting so do you mean that there is in fact a journal entry that has to be recorded when you receive this bill (invoice) ? And what is done in simple terms? Thank you a lot.

In simple terms, to record the amount due to be paid, you have to:

Dr: Utilities expense account
Cr: Supplier account - that'll be the gas/electric/water company

Then, when the money is actually paid, you have to:

Dr: Supplier account
Cr: Bank account

Quote:

---

Originally Posted by Fidget1

In simple terms, to record the amount due to be paid, you have to:

Dr: Utilities expense account
Cr: Supplier account - that'll be the gas/electric/water company

Then, when the money is actually paid, you have to:

Dr: Supplier account
Cr: Bank account

---

Got it, thanks!

It is a payable (liability) but to be treated as accounts payable will depend on the company's accounting policy. It could be treated as an Accrued expense account (credit/liability) because it is an accrued expense. An accrued expense is an expense already incurred but not yet paid like your utility bill that you've received. In most instances, an accounts payable account is usually used from your purchase of inventories on account from the company's supplier if the company is in a merchandising business, however, in service type companies the Accounts Payable is used for some of the bills payable.