The end of period adjustment to record interest on a note payable accumulated, but not yet paid for the period , paid would require:
A) Increasing expenses and increasing liabilities (note payable)
B) Increasing revenue and increasing liabilities (note payable).
C) Increasing assets and increasing owner's equity.
D) Increasing owner's equity and decreasing assets.

Question

Quizplus · Accepted Answer

Accrual accounting requires recognition of the expense when incurred, or accumulated, not necessarily when paid in cash, meaning a liability to pay has increased

The End of Period Adjustment to Record Interest on a Note