The adjusting entry to record accrued interest on a note payable would not result in which of the following?
A)A decrease in net income.
B)A decrease in stockholders' equity.
C)An increase in liabilities.
D)A decrease in current assets.

Question

Quizplus · Accepted Answer

The adjusting entry increases interest payable and interest expense, which decreases both net income and stockholders' equity. An accrual doesn't involve a cash flow and doesn't affect current assets.

The Adjusting Entry to Record Accrued Interest on a Note