Where Is Interest Expense Listed on the Income Statement

question 21

Multiple Choice

Where is interest expense listed on the income statement?

• A) Other expense section
• B) Cost of merchandise sold
• C) Operating expenses
• D) Interest expense is listed on the balance sheet, not the income statement.

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Definitions:

Percentage Analysis

A method of financial statement analysis in which all items are displayed as a percentage of a certain base figure, facilitating comparison between periods or companies.

Financial Statement

A record that outlines the financial activities and current financial condition of a business, entity, or individual, including the balance sheet, income statement, and cash flow statement.

Solvency

The ability of an entity to meet its long-term financial liabilities and obligations.

Current Liabilities

Obligations that a company needs to pay off within one year or within the business's normal operating cycle.