Arkady Makes an Accrual for Accounting and Tax Advisory Fees

Multiple Choice

Arkady makes an accrual for accounting and tax advisory fees in his financial statements for the year ended 31 May 20X8..Which one of the following statements correctly describes the effects of the accrual on his statement of financial position?

A) Capital is increased and both assets and liabilities are decreased.
B) Capital is decreased and liabilities are decreased.
C) Capital is increased and assets are increased.
D) Capital is decreased and liabilities are increased.