Question

accruing unpaid expenses result in

A - increase in assets, increase in revenue

b- Increase in revenue , decrese in asset

c- increase in liability, decrese in revenue

d- decrese in net income , increse in liability

Answer 1

Correct Answer ---- d- decrease in net income, increase in liability.

Explanation

Liability increases because accrued expense creates a liability that will be paid in future. Expenses are accrues so that expenses incurred in a period can be recorded in the same period, such as salaries payable, interest payable etc.

By recording accrued expenses income decreases because overall expenses increase in totality.

Accruing expense does not have any effect on asset value or revenues.