When an Adjusting Entry That Recognizes Accrued Interest Revenue Is

question 91

Multiple Choice

When an adjusting entry that recognizes accrued interest revenue is recorded,

• A)assets increase and liabilities increase.
• B)shareholders' equity increases and liabilities decrease.
• C)assets decrease and liabilities decrease.
• D)shareholders' equity and assets increase.

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Definitions:

Days' Sales Uncollected

A financial ratio indicating the average number of days it takes for a company to collect revenue after a sale has been made.

Accounts Receivable

Money owed to a company by its customers from sales or services on credit that is expected to be paid within a short duration, usually one year.

Inventory Turnover Ratio

A financial metric that measures how many times a company has sold and replaced its inventory over a specific period.

Cost of Goods Sold

The immediate financial obligations related to manufacturing goods sold by a company, involving workforce and materials.