When a Company Has Earned Interest in the Current Period

question 61

Multiple Choice

When a company has earned interest in the current period but has not yet recorded the interest,what type of adjustment is the company required to make?

• A)Make an adjusting entry at the end of the current period to accrue the interest earned.
• B)Make no adjusting entry at the end of the period because interest has not been earned yet.
• C)Make an adjusting entry at the end of the next period to accrue interest earned.
• D)No adjustment is necessary until the cash is collected.

---

Definitions:

Point Estimate

A statistical measure that provides the best single value estimate of a population parameter.

Mean Amount

The average value of a set of numbers, calculated by adding all the values and dividing by the count of numbers.

Sample Mean

Sample mean refers to the average of all the data points in a sample taken from a population, serving as an estimate of the population mean.

Point Estimate

A single value that serves as the best guess or best estimate of a population parameter based on sample data.