At the End of the Year,a Company Makes a Journal

question 9

Multiple Choice

At the end of the year,a company makes a journal entry to accrue the interest expense on a short-term note payable.As a result of this transaction:

• A)current liabilities increase and current assets increase.
• B)current liabilities increase and stockholders' equity increases.
• C)current liabilities decrease and stockholders' equity decreases.
• D)current liabilities increase and stockholders' equity decreases.

---

Definitions:

Firm

An organization that utilizes resources to produce goods or services for profit.

Technological Innovation

The development and application of new ideas, devices, or methods in technology which significantly improve goods, services, or processes.

Cost Curves

Graphical representations of how the cost of production varies with changes in the quantity of output produced, including average and marginal costs.

Average Fixed Cost

Fixed cost divided by the level of output.