What is the impact of an accrued expense on the trial balance?

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Q: What is the impact of an accrued expense on the trial balance?

Solution: Accrued expenses increase expenses and increase liabilities, thus impacting the trial balance.

Steps: 6

Step 1: Understand what an accrued expense is. It is an expense that has been incurred but not yet paid.
Step 2: Recognize that when an accrued expense is recorded, it increases the total expenses on the income statement.
Step 3: Note that increasing expenses will decrease net income, which is reflected in the equity section of the balance sheet.
Step 4: Understand that accrued expenses also create a liability on the balance sheet, as the company owes this amount.
Step 5: Realize that when you record an accrued expense, you make a journal entry that affects both the expense account and the liability account.
Step 6: Finally, know that these changes will be reflected in the trial balance, showing higher expenses and higher liabilities.