In a/an ________, an expense needs to be increased and a liability account set up.
A)accrual
B)prepayment
C)depreciation
D)bad debt adjustment

Question

Quizplus · Accepted Answer

In an accrual, expenses that have been incurred but not yet paid are recorded as a liability, and the amount of the expense needs to be increased to reflect its accurate amount. Therefore, an expense needs to be increased and a liability account needs to be set up. Prepayments, depreciation, and bad debt adjustments do not necessarily involve creating a liability account.

In A/an ________, an Expense Needs to Be Increased and a Liability