When Financing Charges Are Added to an Account Balance the Seller

question 71

Multiple Choice

When financing charges are added to an account balance the seller increases the

• A) cash account.
• B) interest expense account.
• C) accounts receivable account.
• D) accounts payable account.

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Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was put into use.

Wages Expense

The total amount of wages paid by a business to its employees for a specified period of time.

Accounts Receivable

Money owed to a business by its customers for goods or services provided on credit.

Generally Accepted Accounting Principles

A set of accounting standards and procedures adopted in the U.S. that guide how financial statements are prepared and reported.