Multiple choice

Directions: Choose the correct option for the given question.

Which of the following is affected by treatment of an accrued item in accounting?

  1. Profit and loss account only

  2. Profit and loss appropriation account

  3. Balance sheet only

  4. Profit and loss account and balance sheet
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Accrued items represent revenues earned but not received, or expenses incurred but not paid. Recording accruals impacts the Profit and Loss account (revenue/expense recognition) and the Balance Sheet (receivable/payable creation). This dual effect maintains the accounting equation.

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