You pay for Utilities, which account(s) are decreased

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BlackTom AI · Accepted Answer

The question asks which account is decreased when you pay for Utilities. Here is a careful walkthrough of the typical double-entry effects:

- If you pay the utility bill in cash: you record a debit to Utilities Expense (increasing the expense) and a credit to Cash (decreasing Cash). In this scenario, the decreased account is Cash. The Utilities Expense is not decreased; it increases because you incurred an expense.

- If the utility bill was previously recorded as a liability (for example, Utilities Payable) and you now pay it: you would debit Utilities Payable (decreasing the liability) and credit Cash (decreasing Cash). In this scenario, both Cash and Utilities Payable would decrease, while Utilities Expense would still be recognized in a separate entry when the obligation was incurred. The question’s phrasing seems to focus on the payment event, so the key decreased account would be Cash, assuming payment is made at that time.

- If payment were made on account using a debit card or another form of payment, Cash might still be affected similarly (crediting the payment method account) depending on the chart of accounts in use, but the standard, textbook effect for a cash payment remains: Cash decreases and Utilities Expense increases.

- It’s also important to note what is not affected in this transaction: Accounts Receivable does not change, because Utilities is typically an expense and not something that creates revenue receivables directly at payment.

Given the standard treatment, the most consistent conclusion is that the account decreased when you pay for utilities is Cash. If the instruction intended a liability payment (instead of an immediate cash payment), then Utilities Payable could be the account that decreases instead, with Cash also potentially decreasing if paid.

If the provided multiple-choice options were missing, the key concept to memorize is: paying utilities reduces Cash (and increases Utilities Expense on the period of incurrence), whereas settling a previously recognized liability (Utilities Payable) reduces that liability. The exact answer depends on whether the payment is immediate or on account, but Cash is the common decreased account for an immediate cash payment.

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You pay for Utilities, which account(s) are decreased

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