Question

How many of the following events would require an expense to be recorded? Ordering office supplies Hiring a receptionist Paying employees' salaries for the current month Receiving but not paying a current utility bill Paying for insurance in advance
A)Three.
B)One.
C)Two.
D)Four.

Answer 1

Answer:

C)Two.

Paying employees' salaries for the current month

Receiving but not paying a current utility bill.

Explanation:

When salaries are played to employees, an entry is recorded in Salary Expense account.

In accrual accounting when utility bill is received it is recognised in the books even when payment has not been made. Because it is a current utility bill it has to be recorded in this period.