The office electric bill is an example of which accounts category?

• A. Revenue
• B. Assets
• C. Accounts payable
• D. Accounts receivable

Answer: (C)

An office electric bill represents an obligation you owe to a supplier. In the chart of accounts, that obligation is a liability, tracked in accounts payable until you pay it. So the bill shows up as money you owe rather than as something you own (assets) or as income (revenue) or as money others owe you (accounts receivable). When you record it, you typically debit the expense for utilities and credit accounts payable to reflect the liability; when you pay, you debit accounts payable and credit cash, reducing both the liability and the cash balance.