Received Utilities Bill

When a business receives an utilities bill it needs to record these as expenses.

Utilities Bill Journal Entry Example

For example, suppose a business receives a utility bill for 500 and is given credit terms from the supplier.

The accounting records will show the following journal entry in respect of the bill for utilities:

Utilities Bill Journal Entry
Account Debit Credit
Utilities expense 500
Accounts payable 500
Total 500 500

Bookkeeping Explained

Debit
The business has received a utility bill and this is recorded as an expense in the income statement.

Credit
The credit entry represents the liability to pay the supplier in the future for the use of the utilities.

Received Utilities Bill Accounting Equation

The accounting equation, Assets = Liabilities + Owners Equity means that the total assets of the business are always equal to the total liabilities plus the total equity of the business. This is true at any time and applies to each transaction. For this transaction the accounting equation is shown in the following table.

Received Utilities Bill Accounting Equation
Assets = Liabilities + Owners Equity
None = Accounts payable Utilities expense
0 = 500 500

In this case the balance sheet liabilities (accounts payable) have been increased by 500, and the income statement has a utilities expense of 500. The expense reduces the net income, retained earnings, and therefore owners equity in the business.

Popular Double Entry Bookkeeping Examples

This utility bill journal entry is one of many examples used in double entry bookkeeping, discover another at the links below.

Last modified July 16th, 2019 by Michael Brown

About the Author

Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years in all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a BSc from Loughborough University.

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