On January 1,2018,Alice & Co.lends $5,000 to an employee and accepts a 24-month,10% note.At the end of 2018,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 increases Alice & Co.'s interest revenue, which is part of the income statement. This increase in revenue leads to an increase in net income, which, in turn, increases stockholders' equity.