Assuming No Adjusting Journal Entries Have Been Made,the Journal Entry

question 45

Multiple Choice

Assuming no adjusting journal entries have been made,the journal entry to record the cash interest payment on the due date for bonds issued at their par value results in which of the following?

• A)An increase in expenses and a decrease in liabilities.
• B)An increase in expenses and a decrease in assets.
• C)A decrease in both liabilities and stockholders' equity.
• D)A decrease in both assets and liabilities.

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Definitions:

Spending Variances

The difference between the actual amount spent and the budgeted amount for a particular accounting category.

Favorable

A term used in finance and accounting indicating that actual performance is better than the expected or budgeted performance.

Unfavorable

A term used in budgeting and accounting to describe a financial condition or variance that is worse than expected or budgeted.

Revenue Variance

The difference between actual revenue earned and the budgeted or expected revenue.