The Adjusting Entry to Record Interest That Has Accrued on a Note

question 31

Multiple Choice

The adjusting entry to record interest that has accrued on a note payable to the bank will cause an immediate:

• A) Increase in liabilities and reduction in profit.
• B) Decrease in liabilities and reduction in profit.
• C) Decrease in assets and reduction in profit.
• D) Increase in assets and increase in profit.

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