Many current liabilities are affected by accrual accounting entries. This happens because:
A) liabilities are usually paid when they are incurred.
B) accrual accounting involves recognizing liabilities before they are paid.
C) the only way to reduce a liability account balance is with an adjusting entry.
D)accrual accounting frequently involves recognizing liabilities before they are incurred.

Question

Quizplus · Accepted Answer

Accrual accounting involves recognizing liabilities before they are paid, which means that current liabilities can be affected by accrual accounting entries. This is because some liabilities may be recognized and recorded before they are actually paid, such as salaries or interest payable. This can impact the balance of current liabilities on the balance sheet.

Many Current Liabilities Are Affected by Accrual Accounting Entries