Income accrued and received’ results in-

The correct answer is: B. Increase in assets and increase in capital

Income accrued and received results in an increase in assets and an increase in capital. This is because when income is accrued, it is recorded as an asset on the balance sheet. When income is received, it is recorded as a revenue on the income statement. Revenue increases capital, which is the owner’s equity in the business.

Here is a brief explanation of each option:

• Option A: Decrease in assets and increase in capital. This is incorrect because income accrued and received results in an increase in assets, not a decrease.
• Option B: Increase in assets and increase in capital. This is the correct answer because income accrued and received results in an increase in assets and an increase in capital.
• Option C: Decrease in assets and increase in liabilities. This is incorrect because income accrued and received results in an increase in assets, not a decrease.
• Option D: Increase in assets and increase in liabilities. This is incorrect because income accrued and received results in an increase in assets, not an increase in liabilities.