Indicate how each event affects the elements of financial statements. Use the following letters to record your answer in the box shown below each element. You do not need to enter amounts.Increase = IDecrease = DNot Affected = NA(Note that "Not Affected" means that the event does not affect that element of the financial statements or that the event causes an increase in that element that is offset by a decrease in that same element.) On December 31, Year 1, Warren Co. recorded a year-end adjustment to recognize accrued interest expense on a note payable.AssetsLiabilitiesEquityRevenuesExpensesNet IncomeStmt of Cash Flows???????
What will be an ideal response?
(NA) (I) (D) (NA) (I) (D) (NA)
The year-end adjustment to accrue interest expense increases liabilities (interest payable) and decreases stockholders' equity (retained earnings). It increases expenses (interest expense), which decreases net income. It does not affect the statement of cash flows.
You might also like to view...
Three cultural factors that are important to effective communication include:
a. understanding the business communication in the other culture, knowledge of how business communication is taught in the other culture, and knowing that content errors are more difficult to discern than language errors. b. understanding the business communication in the other culture, knowing that syntactic errors are important, and a second language makes errors easier to detect. c. knowledge of how business communication is taught in the other culture, knowing that syntactic errors are important, and a second language makes errors easier to detect. d. knowing that content errors are more difficult to discern than language errors, understanding the business communication in the other culture, and a second language makes errors easier to detect.
All else being equal, which of the following items would increase a company's return on investment (ROI)?
A) A decrease in net income. B) An increase in fixed costs. C) A decrease in average operating assets. D) A decrease in sales volume.
The doctrine of federalism serves to allocate power between the federal government and government by the states
a. True b. False Indicate whether the statement is true or false
Which of the following will lower the breakeven point?
A) a decrease in the sales price per unit B) an increase in total fixed costs C) an increase in the variable cost per unit D) an increase in the sales price per unit