Which of the following transactions that impact current liabilities has a corresponding entry on the income statement? A) Purchase inventory on credit from Company XYZ on January 1 B) Payment to XYZ on February 1for a January 1 purchase C) Interest accrued on a note payable D) Payment to employees in March for wages earned in February

Question

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The purchase of inventory on credit is recorded as an increase in both inventory (noncash asset) and accounts payable (liability) on the balance sheet. Payment of accounts payable is recorded as a decrease in cash and accounts payable on the balance sheet. Interest accrued on a note payable is recorded as an increase in current liabilities (interest payable). An increase in interest expense is recorded on the income statement. Payment of accrued wages is recorded as a decrease in both cash and wages payable (liability).

Which of the Following Transactions That Impact Current Liabilities Has