Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 25 - No. 34)
What is the effect of recording an adjustment for accrued salaries on the statement of financial position?
Increases assets and decreases liabilities.
Decreases assets and decreases liabilities.
Increases liabilities and decreases owner's equity.
Decreases liabilities and increases owner's equity.
Explanation
Accrued salaries increase liabilities (salaries payable) and decrease owner's equity (retained earnings).
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