At the End of the Year, a Company Makes a Journal

question 21

Multiple Choice

At the end of the year, a company makes a journal entry to accrue the interest expense on a short-term note payable. As a result of this transaction:

• A) current liabilities increase and current assets increase.
• B) current liabilities increase and equity increases.
• C) current liabilities decrease and equity decreases.
• D) current liabilities increase and equity decreases.

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Definitions:

Agoraphobia

A fear of going out to public places.

Generalized Anxiety Disorder

A disorder marked by a chronic high level of anxiety that is not tied to any specific threat.

Arachnophobia

An intense and irrational fear of spiders and other arachnids, leading to avoidance or distress at the thought or sight of them.

Obsession

Persistent, intrusive, and unwanted thoughts that cause distress or anxiety.