Which of the Following Statements About the Recording of Interest

question 83

Multiple Choice

Which of the following statements about the recording of interest on notes receivable is correct?

• A)Interest on notes receivable is recorded as revenue only when the cash is received.
• B)When a company makes an interest payment on a note,the payment is debited to Interest Receivable.
• 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 Revenue.

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Definitions:

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