Journal Entry for Utilities Payable

Journal Entry for Utilities Payable

In this article we would discuss the journal entry for utilities payable. Utilities payable are those utilities, which are incurred, but not paid yet. The utilities are charged as expense, while utilities payable are treated as liability or accrued liability  under the accrual concept of accounting.

Date	Particular	Ledger Folio	Dr.	Cr.
	Utilities		xxx
	Utilities payable			xxx

Utilities payable is a common adjusting entry at the end of financial year, because utilities of the last month of a financial year shall be paid in the coming month (first month of next financial year). Therefore to record the expense in the right financial year, the adjusting entry is recorded in the books of accounts.

Examples of Journal Entries for Utilities Payable

Electricity meter reading shows the 15,000 units consumed during December 2016. The rate per unit is 10. The bill would be received in January, 2017. The following journal entry would be recorded for utilities payable

Date	Particular	Ledger Folio	Dr.	Cr.
31-12-2017	Utilities		150,000
31-12-2017	Utilities payable			150,000

Journal Entry for Utilities Payable Payment

Utilities payable is a kind of liability and shall be settled in future. The following settlement journal shall be recorded on the payment of accrued liability of utilities. The liability would be settled by paying cash. Therefore liability would be  debited and cash would be credited.

Date	Particular	Ledger Folio	Dr.	Cr.
01-01-2017	Utilities Payable		150,000
01-01-2017	Cash			150,000