The adjusting entry to record accrued interest receivable has what effect on the basic accounting equation?
A)Increase assets,increase liabilities
B)Decrease assets,decrease liabilities
C)Increase assets,increase stockholders' equity
D)Increase assets,decrease stockholders' equity
E)Decrease liabilities,increase stockholders' equity

Question

Quizplus · Accepted Answer

The adjusting entry to record accrued interest receivable would increase assets (by debiting Interest Receivable) and increase stockholders' equity (by crediting Interest Income). It does not affect liabilities. Therefore, the best choice is C.

The Adjusting Entry to Record Accrued Interest Receivable Has What