Which of the following transactions and events results in an increase in liabilities and a decrease in net income?

The accrual of wages expense at year-end.

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Collecting cash from a customer for services to be provided in the future.

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The accrual of revenue earned at year-end.

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Adjustment of the unearned revenue accounts for revenue earned during the period.

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Solution

The correct option is A
The accrual of wages expense at year-end.

Answer a. The accrual of wages expense at year-end
Explanation: The accrual of wages expenses at the year-end increases the liabilities and decreases the net income as the organisation must pay wages to its employees.

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Similar questions

Q. Give one example of each of the following transactions:
(i) Increase in an asset and a liability.
(ii) Decrease in an asset and a liability.
(iii) Increase in assets and capital.
(iv) Decrease in assets and capital.

Q. Calculate Cash Flow from Operating Activities from the following information.

Particular	31^st March 2017 (Rs)
Net Profit (Difference between Closing and Opening Balance of Surplus, i.e., Balance in Statement of Profit and Loss)	8,00,000
Final Dividend paid in the year	1,10,000
Compensation for Natural Disaster credited to Statement of Profit and Loss	75,000
Depreciation	1,50,000
Loss on Sale of Investment	30,000
Gain (Profit) on Sale of Land	90,000
Provision for Tax	1,10,000
Dividend Received	20,000
Decrease in Current Assets (Other than Cash and Cash Equivalents)	40,000
Increase in Current Liablilities	70,000
Decrease in Current Liabilities	10,000
Increase in Current Assets (Other than Cash and Cash Equivalents)	60,000
Income Tax Refund	10,000
Income Tax Paid	1,20,000

Give an example for each of the following types of transaction.
(i) Increase in one asset, decrease in another asset.
(ii) Increase in asset, increase in liability.
(iii) Increase in asset, increase in owner's capital.
(iv) Decrease in asset, decrease in liability.
(v) Decrease in asset, decrease in owner's capital.
(vi) Decrease in liabilities, increase in owner's capital.
(vii) Increase in one liability, decrease in another liability.
(viii) Increase in liabilities, decrease in owner's capital.

A trader dealing in pressure cooker reduced the price by 20% as a result of which his sale went up by 80%. What was the net effect on his sales income?
(A)44% decrease
(B)44% increase
(C)66% increase
(D)66% decrease

Q. _________ is an art of recording, classifying, summarising transactions and events which are of financial character in terms of money and interpreting the result thereof.

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Which of the following transactions and events results in an increase in liabilities and a decrease in net income?

The correct option is A The accrual of wages expense at year-end.Answer a. The accrual of wages expense at year-endExplanation: The accrual of wages expenses at the year-end increases the liabilities and decreases the net income as the organisation must pay wages to its employees.

The correct option is A
The accrual of wages expense at year-end.

Answer a. The accrual of wages expense at year-end
Explanation: The accrual of wages expenses at the year-end increases the liabilities and decreases the net income as the organisation must pay wages to its employees.