Recognizing a Loan Received as Revenue Instead of as a Liability

question 58

Multiple Choice

Recognizing a loan received as revenue instead of as a liability has a positive effect on the reported financial statements for all of the following except:

• A)It understates liabilities.
• B)It overstates revenues.
• C)It overstates net income.
• D)It understates expenses.

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Definitions:

Environment

The surrounding condition or setting in which a person, plant, or animal lives or operates.

Interpret

To explain the meaning of information, words, or actions in a way that makes sense to the learner.

Retrieve

The action of getting or bringing something back, especially information or data from a database or memory storage.

Ethical Issues

Concerns about morality and fairness in behavior, decisions, and actions within a range of contexts including personal, professional, and social environments.