What effects would the accrual of $50 of interest on a note payable have on financial statements? I. Balance sheet: Liabilities are decreased by $50 II. Income statement: Expenses are increased by $50 III. Balance sheet: Retained earnings are decreased by $50 IV. Balance sheet: Cash assets are decreased by $50 V. Balance sheet: Liabilities are increased by $50 Answer A. IV and V B. I, II and III C. II, IV and V D. II, III and V E. II, III and