Question

A transaction that is likely to cause an increase in a current liability is: Multiple Choice payment of accrued wages. accrual of interest expense. depreciation of equipment. accrual of bad debts expense

Answer 1

Answer:

The correct answer is accrual of interest expense.

Explanation:

Interest expense is an expense you incur when you borrow money. The lender charges you a specific interest rate that is expressed in your loan document. As time passes, you are charged interest on the amount you borrowed. You may have to calculate the simple or compound interest on your loan depending on how it is structured. If the loan is for business, you will enter interest expenses in your accounting records.