On January 1,2015,Alice & Co.lends $5,000 to an employee and accepts a 24-month,10% note.At the end of 2015,what effect will the adjustment for accrued interest revenue have on the Alice & Co.'s financial statements?

Question

Quizplus · Accepted Answer

The adjustment for accrued interest revenue will increase interest revenue, which is part of net income. An increase in net income will increase stockholders' equity through retained earnings.