Adjusting Entries: Accrued Expenses Video Lessons

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Problem: In Year 2, Greenleaf Company records the payment of $400 cash for an expense accrued in Year 1 and records the accrual of $225 for another expense. The impact of these two entries on Year 2 total expenses and liabilities is:      Total Expenses        Liabilities a) Increase by $625 Decrease by $225 b) Increase by $625 Decrease by $625 c) Increase by $225 Decrease by $625 d) Increase by $225 Decrease by $175 e) Decrease by $175 Decrease by $175

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Problem Details

In Year 2, Greenleaf Company records the payment of $400 cash for an expense accrued in Year 1 and records the accrual of $225 for another expense. The impact of these two entries on Year 2 total expenses and liabilities is:

     Total Expenses        Liabilities

a) Increase by $625 Decrease by $225

b) Increase by $625 Decrease by $625

c) Increase by $225 Decrease by $625

d) Increase by $225 Decrease by $175

e) Decrease by $175 Decrease by $175

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