The Company Accrued Interest Revenue of $6,000 Earned on an Investment

question 200

Multiple Choice

The company accrued interest revenue of $6,000 earned on an investment in an adjusting entry dated December 31,2014.A check for this amount was received on January 9,2015.How would the company record this transaction?

• A)Debit Cash for $6,000 and credit Interest Revenue for $6,000.
• B)Debit Interest Receivable for $6,000 and credit Interest Revenue for $6,000.
• C)Debit Interest Expense for $6,000 and credit Interest Revenue for $6,000.
• D)Debit Cash for $6,000 and credit Interest Receivable for $6,000.
• E)Debit Interest Revenue for $6,000 and credit Income Summary for $6,000.

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Definitions:

Income Inequality

The unequal distribution of household or individual income across the various participants in an economy.

Ability-to-pay Principle

A tax principle that suggests taxes should be levied according to an individual or entity's capacity to pay, reflecting their income or wealth.

Transfer Payments

Payments made by governments to individuals or other entities without the expectation of a direct return or the provision of goods or services, such as social security benefits or subsidies.

Income Distribution

The way in which a nation's total GDP is distributed amongst its population.