When Interest Is Accrued on a Note Payable,but Not Paid,the

question 63

Multiple Choice

When interest is accrued on a note payable,but not paid,the

• A)Interest Expense account is increased;the Interest Payable account is increased.
• B)Interest Expense account is decreased;the Interest Payable account is increased.
• C)Notes Payable account is increased;the Interest Payable account is increased.
• D)Interest Expense account is increased;the Interest Payable account is decreased.

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Definitions:

Proprietorship

A type of business entity owned and run by one individual where there is no legal distinction between the owner and the business.

Accounting Records

Documentation and books that keep track of the financial transactions, operations, and condition of a business.

Revenues Recognized

Refers to the income that a company has earned and reported on its financial statements for a specific period, in accordance with accounting principles.

FASB Conceptual Framework

The Financial Accounting Standards Board (FASB) Conceptual Framework is a coherent system of interrelated objectives and fundamentals that is intended to lead to consistent standards.