FAQs
A current liability account that reports the amounts owed to the utility companies for electricity, gas, water, phone as of the date of the balance sheet.
What is the explanation for utilities payable? ›
Answer and Explanation:
Utilities payable in accounting refers to the utility bills that the company used in advance but have not yet been paid. Examples of utility bills are electricity, water, and gas. Ideally, the business should pay this periodically and on-time.
What is the meaning of utilities expense? ›
Utility expenses refer to the cost of services required to run a home or business, such as electricity, gas, water, sewage, and garbage collection. What are examples of utilities? Examples of utilities include electricity, natural gas, water, sewage services, trash removal, and sometimes telephone services.
Is utilities expense debit or credit? ›
Utility expenses refer to the costs related to water, electricity, etc. These expenses are indirect expenses for a business, and we debit them to record the expenses. They generally have a debit balance, and if we want to decrease the utility expense, we will have to credit the account.
What is the journal entry for utility payment? ›
The journal entry to record the payment of the current month's utility bill would include b) a debit to Utilities Expense and a credit to Cash. If the payment of the utility was using a credit card and not a check, you would record the payment as a credit to Accounts Payable instead of Cash.
What is bills payable in detail? ›
Bills payables are physical records of an enterprise's financial obligations. These business liability documents show the amount an organization owes for credit purchases of products and services. Bills payable books can also include service invoices, utility bills, and phone bills.
What is the bills payable? ›
Bills payable are business documents that show the amount owing for goods and services sold on credit. Bills payable can include service invoices, phone bills and utility bills. Small businesses that track their financial accounting using the accrual method have to carefully record their business debts.
What type of account is utilities payable? ›
Presentation of utilities payable
This is considered a current liability as the balance owed is typically payable in less than one year. The initial entry to record a current liability is a credit to the most applicable current liability account and a debit to an expense or asset account.
What is the difference between utilities payable and utilities expense? ›
Utilities expense is not the same as utilities payable. Utilities expense is the year-to-date or period-specific cost of utilities, while the payable is just the unpaid amount of utility bills. Thus, the utilities expense is usually much higher than the utilities payable balance.
What is the meaning of utilities? ›
: a service (such as light, power, or water) provided by a public utility. (2) : equipment or a piece of equipment to provide such service or a comparable service. 4. : a program or routine designed to perform or facilitate especially routine operations (such as copying files or editing text) on a computer.
Utilities are the basic services your home, apartment, or business needs to keep it comfortable and functioning properly. Common utilities include water, sewer, electric, gas, trash, and recycling. Technology subscriptions like cable TV, internet, security, and phone service can also be considered utilities.
What are examples of utilities expenses? ›
Typically, utilities include electricity, water, and gas bills. You can also add sewage, trash, and recycling, as well as TV, internet, phone, and streaming services to the list. ⏰ TIP: Utility bills are often used as proof of residence, especially for licensing and passport needs.
Is internet a utility expense? ›
Even though your internet and energy bills are considered utilities it can be important to monitor or compare their prices with competitors. (That's if you live in a state or area where competitors are located.) EPB does a great job at offering its customers affordable rates through the Levelized Billing program.
How do you record paid utilities expenses? ›
To record an expense, you enter the cost as a debit to the relevant expense account (such as utility expense or advertising expense) and a credit to accounts payable or cash, depending on whether you've paid for the expense at the time you recorded it.
How to record the received utility bill? ›
Answer and Explanation: When a company receives a utility bill, the journal entry will be: Credit: Accounts Payable (Liability) Debit: Utility expense (Owners Equity). We listed the utility expense under Owners Equity because of how it affects it.
What is the difference between utilities expense and utilities payable? ›
Utilities expense is not the same as utilities payable. Utilities expense is the year-to-date or period-specific cost of utilities, while the payable is just the unpaid amount of utility bills. Thus, the utilities expense is usually much higher than the utilities payable balance.
What type of account is utilities expense? ›
Operating expenses: This is the most common category for utilities, as they are typically used in the day-to-day operations of the business. This would include items like electricity, water, and gas.
Is utilities payable on the income statement? ›
Answer and Explanation:
Utilities cost appear on the section of operating expenses of an income statement. The utility cost varies depending on the used amount in a certain period. Examples of utility costs are electricity and water.
Are utilities payable current? ›
Current liabilities are short-term debts that you pay within a year. Types of current liabilities include employee wages, utilities, supplies, and invoices. Noncurrent liabilities, or long-term liabilities, are debts that are not due within a year.
