Question

The adjusting entry to record an accrued expense is:

a. Increase an expense; increase a liability.

b. Increase an asset; increase revenue.

c. Decrease a liability; increase revenue.

d. Increase an expense; decrease an asset.

Answer 1

The adjusting entry to record an accrued expense is to increase an expense and increase a liability.

Step-by-step explanation:

The adjusting entry to record an accrued expense is: a. Increase an expense; increase a liability.

This means that when an expense is incurred but not yet paid, it is necessary to record the expense as well as the corresponding liability on the company's books.

For example, if a company accrues $1,000 of wages expense but has not yet paid the employees, the adjusting entry would be to increase the wages expense account by $1,000 and increase the wages payable liability account by $1,000.