For questions 135 through 137:Indicate how each event affects the financial statements model. Use the following letters to record your answer in the box shown below each element. You do not need to enter amounts.Increase = I Decrease = D No Effect = NA(Note that "No Effect" means that the event does not effect that element of the financial statements or that the event causes an increase in that element is offset by a decrease in that same element.)Carson Company accrued $100 of interest expense.AssetsLiabilitiesEquityRevenuesExpensesNet IncomeStmt of Cash Flows???????
What will be an ideal response?
(NA) (I) (D) (NA) (I) (D) (NA)
Accruing interest expense increases liabilities (interest payable) and decreases equity (interest expense decreases retained earnings). It increases expenses and decreases net income. It does not affect cash flows.
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