When expense is accrued what is the effect on assets and income respectively?

When an expense is accrued, it increases liabilities on the balance sheet, as the company acknowledges an obligation to pay in the future. This does not directly affect assets at the time of accrual. However, it reduces net income on the income statement because the expense is recognized in the period it is incurred, even though cash has not yet been paid out. Overall, the accrual of expenses leads to a decrease in equity due to the lower net income.