Which of the Following Statements Is Correct Regarding the Adjustment

question 166

Multiple Choice

Which of the following statements is correct regarding the adjustment to record interest accrued on a note payable?

• A)Interest on the note payable is classified as an expense since it is a cost of borrowing.
• B)Interest on a note payable should be credited to Notes Payable because it increases the amount of principal to be repaid at the maturity of the note.
• C)Interest on the note payable is classified as revenue since it is an amount that can be earned on investments.
• D)Interest on the note payable will not accumulate because it is paid at the end of each year.

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World Price

The global market price of a good or service, determined by worldwide demand and supply.

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Refers to the acquisition of goods or services from a foreign country for domestic use.

Export

The process of sending goods or services to another country for sale.

World Price

The international market price of a commodity or product, determined by global supply and demand forces.