Which of the Following Statements Regarding the Recording of Interest

question 92

Multiple Choice

Which of the following statements regarding the recording of interest on notes receivable is true?

• A) Interest on notes receivable is recorded as revenue only when the cash is received.
• B) When a company receives an interest payment on a note, the entire payment is recorded as revenue when received.
• C) Interest on notes receivable is recognized when it is earned which is not necessarily when the interest is received in cash.
• D) Interest earned but not yet received must be recorded in an adjusting entry which includes a debit to interest

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