Which of the Following Describes the Reporting of Interest Expense

question 99

Multiple Choice

Which of the following describes the reporting of interest expense on the income statement?

• A)It is reported as an operating expense.
• B)It is a component of operating income.
• C)It is deducted from operating income.
• D)It is added to operating income.

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Definitions:

Variable Cost

Costs that vary directly with the level of production or output, such as raw materials and labor expenses.

Product-oriented Layout

An arrangement of resources in a production environment where machinery and equipment are organized according to the sequence of operations required to produce a particular product efficiently.

Sugar Beets

Sugar beets are a root vegetable typically cultivated in temperate climates for the production of sugar, containing a high concentration of sucrose.

Assembly Line Balancing

The process of assigning tasks to workstations, so that each has a similar amount of work and the production process is as efficient as possible.