Accounting



If an accrual adjusting entry increases an expense and a liability, how does the balance sheet remain in balance?


An expense is a temporary account which reduces owner’s equity or stockholders’ equity. The decrease in owner’s equity will offset the increase in the liability account.

Learn more about the Accounting Equation.

Related Questions

the accounting coach

About the Author: Harold Averkamp (CPA) has worked as an accountant, consultant, and university accounting instructor for more than 25 years.

He is the creator of the AccountingCoach Pro which has been praised for its ability to simplify accounting in a way that anybody can understand.

Learn more about AccountingCoach Pro