1 A company received a utlity bil of 660 but did not pay it

1. A company received a utlity bil of $660 but did not pay it Indicate the amount of increases and decreases in the accounting equation. (Decreases should be indicated by a minus sign Assets I = | Liabilities | + |Stockholders\' E

Solution

Journal Entry would be Utilities Expense Debit and Utilities Payable with amount of Rs.660.

Accounting Equation

In this case balance sheet has been increased by 660 and income statement has a Utilities Expense of 660. The expense reduces the net income,i.e. owners equity.

Assets	=	Liabilities	+	Owners Equity
-	=	Utilities Payable	+	Utilities Expense
0	=	660	+	-660