Which of the Following Does Not Correctly Describe the Following $\quad$

question 69

Multiple Choice

Which of the following does not correctly describe the following journal entry? Interest receivable
$\quad$$\quad$ Interest income

• A)Total assets increase.
• B)The transaction is an example of an accrual.
• C)Stockholders' equity is not affected.
• D)Net income increases.

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Definitions:

Income Statement

An Income Statement is a financial document that shows a company's revenue, expenses, and profits or losses over a specific period.

Excess Inventory

A situation where a company holds a larger amount of inventory than it can sell or use within a reasonable period, often leading to increased costs.

Tied-up Funds

Money that is currently invested, in use, or otherwise not readily available for free spending or other investment opportunities.

Lost Sales

Potential sales that were not realized due to stock shortages, inadequate service, or other operational issues.