Question

On December 31, the company paid a $200 invoice that they received in November for electricity. What was the amount of the invoice?

Answer 1

The amount of the invoice was $200.

Step-by-step explanation:

The payment of a $200 invoice on December 31 for electricity, which was received in November, indicates that the invoice's original amount was indeed $200. In accounting terms, when a company receives an invoice, it records a liability, acknowledging the obligation to pay.

In this case, the invoice was received in November, and the payment was made on December 31. The act of payment essentially settles the liability and fulfills the financial obligation recorded when the invoice was initially received.

This timing difference between receiving the invoice and making the payment is a common practice in business. It allows companies to manage their cash flow effectively, ensuring that payments are made when due but also optimizing the use of available funds.

Therefore, the $200 payment made on December 31 for the electricity invoice received in November confirms that the original amount of the invoice was indeed $200. This payment settles the recorded liability, providing a clear financial picture for the specified transaction and reflecting the company's commitment to meeting its financial obligations in a timely manner.

Answer 2

The amount of the invoice for electricity received in November was $200.

Explanation

The $200 invoice paid on December 31 was for the electricity received in November. Companies typically receive invoices for services or goods provided prior to the billing date.

In this case, the December payment reflects the November electricity usage. It's common for businesses to settle bills after the service period, aligning with the terms outlined in the agreement or billing cycle.

The practice of invoicing and payment in business often involves a delay between the service or goods rendered and the actual payment. This delay allows companies to manage their cash flow effectively while still ensuring timely payments to their suppliers or service providers.

In this scenario, the $200 paid at the end of December corresponds to the November electricity usage, indicating that the invoiced amount for the electricity received was indeed $200.