I am a partner at a startup design company which has come up with a new novel simple electronic device for household use. Do I need an actual circuit diagram with all the parts, LCD's, clock, etc with wiring to actually be a working device, to have my utility patent application approved, or can I make it a generic diagram which can be understood by laymen? I was reading that it is better to make your patent claims somewhat generic, but I was debating whether the circuit diagram would need to be a working device.
The patent description needs to be sufficiently detailed to permit "one of ordinary skill in the art" to replicate it. I don't recall having seen a patent without any drawings - particularly for inventions involving electronic circuits. The figures help to set context - worth a thousand words and all that. Look at the figures in a few other patents and you will see that the level of detail covers the entire spectrum from block diagrams to precise circuit elements.
The level of detail in the drawings and the scope of the claims are not necessarily linked. In addition, your patent may contain both broader and narrower claims. Each claim effectively defines a separate invention.
Drafting a patent - the drawings, the written specification and the claims - is a professional skill. You would do well to employ a professional to protect such a valuable asset.
I would add to User96's good answer that the description of the patent must also show that the inventor had "possession" of the invention (though the courts have been somewhat unclear in defining possession). So a diagram or drawing can help with that as well. In general if it would help in understanding your invention, you should strongly consider including it.
In general, patents contain simple block-diagrams which articulate the key features of the device or mechanism you wish to patent. If the key feature of your idea is embodied in a specific circuit (for the sake of argument, with say 10 components or less) then a circuit diagram is probably appropriate. If on the other hand, it's going to involve several op-amps or a small microcontroller then probably the key idea can (and should) be abstracted to a higher level - and having redundant detail is a sure sign of a novice's patent!
The important bit of a patent are the Claims; the preamble before them sets the context and should be sufficient for someone "skilled in the art" to verify that your idea is indeed practical and workable.
I would expect a patent for an electronic alarm clock (if they hadn't already been invented) would indicate a "means for displaying the current time" "a means for displaying and changing the time of the required alarm" "a circuit which keeps time" "a device capable of making a sound sufficiently loud to wake a sleeping person" "a circuit or system which detects when the current time = the preset alarm time and when this occurs sounds the alarm". I wouldn't expect a full circuit diagram. In contrast, in a previous job we were designing circuits which go in individual pixels of an LCD or OLED display screen, where the objective is to get much performance from as few transistors and capacitors as possible (because they have to be physically very very small). In this case it was entirely appropriate (and required) to show a circuit diagram showing the 2 to 4 transistors and 2-3 capacitors and how they were arranged and what waveforms had to be applied to them.
I would recommend keeping drawings at a higher level (block diagrams, etc) whenever possible. If you get too specific, you risk running into problems if you ever tweak your design. For example, you might discover that it's cheaper to use two 10k resistors in series instead of one 20k resistor, or you might have to source a part from a different manufacturer that has a slightly different pinout or requires additional passive components. If you included a detailed circuit diagram in your patent, then your device wouldn't match the diagram in the patent any longer, even though it's essentially the same thing. Along a similar line of thinking, including overly-specific descriptions can make it easier for a competitor to "work around" the patent.
That being said, it's the claims of the patent (the "legal-ese", if you will) that truly determine the scope of the invention being protected. The illustrations and diagrams are merely there to provide additional clarity. They are not binding in the same way as claims. As long as your claims are well-written, you shouldn't need extensive detail in your diagrams. Providing too much detail may actually be detrimental. A patent examiner is more likely to interpret a high-level block diagram correctly than a detailed schematic that requires interpretation or a circuit simulator to understand.
There are two important reasons to include greater detail in a patent application.
One, to ensure that you have an enabling disclosure. This means that, given what's disclosed in your application as well as what is taught by the prior art, one having ordinary skill in the art (i.e., not someone of expert skill) has to be able to make and use the invention. So, if the design of the circuit is straightforward based on a block diagram, then you wouldn't need to include the full circuit diagram. But if there are subtleties to the design, the additional detail may be needed.
Two, to give you more places to go if it turns out the broader invention is already taught by the prior art. You can then rely on some of those details to arrive at claims that aren't obvious over the prior art.
But most importantly - drafting a patent application is not really for the layman. If you file pro se, you will almost certainly screw it up the first several times. A registered patent attorney or agent has training to draft an application that gets you more patented claim scope with less potential for invalidation if the patent ever gets litigated. Without understanding the law, it's possible to inadvertently make it impossible to get a patent for your invention or to reduce the available claim scope unnecessarily, by causing your own publications and/or public sales to become prior art.