What effect does "recognizing accrued Interest Revenue at the end of the accounting period" have on the accounting equation?
A)Assets increase and Stockholders' equity decreases.
B)Assets increase and Stockholders' equity increases.
C)Assets decrease and liabilities decrease.
D)Liabilities increase and Stockholders' equity decreases.

Question

Quizplus · Accepted Answer

Recognizing accrued Interest Revenue at the end of the accounting period will increase the assets (as cash or accounts receivable will increase) and increase the stockholders' equity (as revenue will increase). This is because recognizing accrued revenue means recognizing revenue that has been earned but not yet received or entered into the accounting records. As a result, the accounting equation will remain balanced.

What Effect Does "Recognizing Accrued Interest Revenue at the End