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Where would unpaid utilities go on an end month income statement?


I have an accounting homework problem I'm not quite sure about. I'm doing an income statement for the end of January to find out the amount of net income.

The part I'm stuck at says during the month, according to the checkbook, you paid $37,000 for salaries, rent, supplies, advertising, and other expenses; however, you have not yet paid the $900 monthly utilities for January on the store and fixtures.

How would I put those unpaid $900 utilities for the month into the income statement to find the amount of net income for the month?

538 day(s) ago

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Answers (1)

MelonsO
The $ 900 would hit your income statement provided your doing accrual based accounting - Thats GAAP the entry would be:

expense 900
expense payable 900

then when it is paid:
expense payable 900
Cash 900

If your doing cash basis accounting then it would not hit your income statement until the bill is paid and cash leaves the company.

any other questions ontact me

Posted 538 days ago

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