A Company Had an Increase in Interest Payable During the Year

question 56

Multiple Choice

A company had an increase in interest payable during the year and also amortized discount on bonds payable.Under the direct method, the amount of interest paid during the year to be reflected in the statement of cash flows is

• A)interest expense plus the increase in interest payable minus the discount amortization
• B)interest expense plus the increase in interest payable plus the discount amortization
• C)interest expense minus the increase in interest payable minus the discount amortization
• D)interest expense minus the increase in interest payable plus the discount amortization

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Definitions:

Product-Identification Label

Labels on products providing information about the manufacturer, brand, and specific details about the product, often used for tracking and identification purposes.

Description of Goods

A detailed account or specification of the physical and sometimes functional characteristics of goods in a contract for sale.

Implied Warranty

A warranty that the law derives by implication or inference from the nature of the transaction or the relative situation or circumstances of the parties.

Warranty of Merchantability

An implied guarantee that a product will meet the standard quality and performance expectations for goods of its kind.