Here are Journal Entry for Received Utility Bill to Be Paid Next Month. When a utility bill is received but will be paid in the following month, it needs to be recorded as an expense for the current period and a liability for the amount due.
Example Scenario
Let’s assume Company A receives a utility bill of ₹10,000 on 15-06-2024, which is to be paid next month.
Journal Entry to Record the Utility Bill
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| 15-06-2024 | Utility Expense | 10,000 | Recording the utility expense | |
| 15-06-2024 | To Utility Payable | 10,000 | Recording the liability for utility bill |
Explanation:
- Utility Expense Account Debit: Increases the expense account, reflecting the cost of the utility services used.
- To Utility Payable Account Credit: Increases the liability account, indicating the amount owed for the utility bill to be paid next month.
Conclusion
Recording utility expenses accurately, even when the payment is deferred to the next month, ensures that the company’s financial statements reflect the correct expenses and liabilities for the current period.