Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 19 - No. 45)
What impact do accrued expenses have on the statement of financial position?
Increase liabilities and increase equity.
Increase assets and decrease liabilities.
Increase liabilities and decrease equity.
Decrease liabilities and increase equity.
Explanation
Accrued expenses represent the obligations owed but not yet paid. This increases liabilities and decreases equity (through expense recognition).
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