19 a company received a utility bill of $650 but did not pay it. indicate the amount of increases and…

19 a company received a utility bill of $650 but did not pay it. indicate the amount of increases and decreases in the accounting equation. note: decreases to account classifications should be entered as a negative.

19 a company received a utility bill of $650 but did not pay it. indicate the amount of increases and decreases in the accounting equation. note: decreases to account classifications should be entered as a negative.

Answer

Explanation:

Step1: Understand accounting equation

The accounting equation is Assets = Liabilities + Stockholders' Equity. When a company receives a utility bill but doesn't pay it, it creates a liability.

Step2: Analyze impact on accounts

The utility expense will decrease stockholders' equity (because expenses reduce net - income which affects equity). And a liability (Accounts Payable for utilities) is created. There is no impact on assets.

Answer:

Assets: 0 Liabilities: + 650 Stockholders' Equity: - 650