Received A Utility Bill To Be Paid Next Month Journal Entry

Received Telephone Bill, Electricity Bill, Gas, Water Bill, etc., To Be Paid Next Month Journal Entry

When a company / corporation Received A Utility Bill (Electricity, Telephone, Gas or Water Bill) to be paid next or following month, the following journal entry is recorded as shown below:

                                           Utility Expenses a/c  XXX

 

                                                                             Utility Bill Payable a/c  XXX

 

                                       (Utility Bill Received But Still Due Or Unpaid For The Next Month)

So, we debit Utility Expenses Account as it is increased and credit Utility Bill Payable Account (or Accounts Payable Account) as it is a Current Liability and as we don’t pay our bill, so it is also increased.

The Effect Of Received A Utility Bill To Be Paid Next Month Journal Entry On Accounting Equation

The effect of this transaction on Accounting Equation is that we deduct the amount of utility expenses from equity on right side and add the amount of utility payable in Liabilities on the right side i.e., Liabilities & Equity side.

So, this is the journal entry for received utilities bill but did not pay it until the following month.

On the next month, when the company actually, paid the utility bill to supplier company, then, we record the following entry:

                                                  Utility Bill Payable a/c  XXX

 

                                                                                          Cash a/c / Bank a/c  XXX

 

                                                                 (Bill Now Paid For The Month)

In the above entry, if the company paid by cash, we credit cash account but if the company paid by cheque / check and the check is deposited into the bank account of supplier company, then we credit the bank account.

On accounting equation, we deduct (minus) the amount of cash or bank account from Assets on left side and deduct the amount of utility bill payable from Liabilities on right side of accounting equation.