How Does an Accrued Expense Adjustment Affect the Financial Statements

question 23

Multiple Choice

How does an accrued expense adjustment affect the financial statements? The adjustment:

• A)increases expenses and decreases assets.
• B)increases expenses and increases liabilities.
• C)decreases expenses and increases liabilities.
• D)decreases expenses and increases assets.

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Definitions:

Overconfidence

Overestimating an individual’s prospects or abilities.

Investor

refers to an individual or entity that allocates capital with the expectation of receiving financial returns.

Risk

The exposure to uncertainty or the potential for financial loss and variability in investment returns.

Probability

A measure of the likelihood of a certain event or outcome, typically expressed as a number between 0 and 1.