Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 7 - No. 15)
What is the impact of accrued expenses on the financial statements?
Increase assets and decrease liabilities.
Decrease assets and increase liabilities.
Increase liabilities and decrease equity.
Decrease liabilities and increase equity.
Explanation
Accrued expenses increase liabilities (as the company owes money) and decrease equity (through the expense).
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