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signment/takeAssic p-c cengageNOWu2 l Online te..x | L e Calculator How does receiving a bill to be paid next month for services received affect the accounting equation? 0 a. assets increase; liabilities increase Ob. liabilities increase; owner\'s equity decreases Oc. assets decrease; owner\'s equity decreases Od. liabilities increase, owner\'s equity increases

Solution

Answer : B) liabilities increase; owner\'s equity decreases

receipt of an electric bill to be paid next month for services received after the accounting equation

Liabilities increase and equity decreases. The journal entry would be:

Debit Utilities Expense             XXXX
Credit Accounts Payable                                 XXXX

The utilities expense are subtracted from owner\'s equity when closing entries are made.