A Belle Glade job trailer utility bill is expected to be $18,600 for a 30-day month. If 18 days have been incurred but not billed at month-end, what expense should be accrued?
Correct Answer
B) $11,160.00
Accrue the portion of the monthly cost incurred through month-end.
Why This Is the Correct Answer
Accrue the portion of the monthly cost incurred through month-end.
Why the Other Options Are Wrong
Option A: $18,600.00
$18,600.00 is above the supported result for accrued expense; it likely adds an unsupported amount or compares the wrong financial base.
Option C: $7,440.00
$7,440.00 is below the supported result for accrued expense; it likely uses the wrong base, period, or account bucket.
Option D: $620.00
$620.00 is below the supported result for accrued expense; it likely uses the wrong base, period, or account bucket.
Memory Technique
Accrued Expense drawer for Accountant Records: label accrue before counting dollars.
Reference Hint
Open-book path: tab Builder's Guide to Accounting, 2001 to Section Three, Adjusting Entries, Accrued Expenses; use the job ledger figures in the stem and recompute the same accounting measure.
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