Which of the Following Correctly Describes the Accounting Treatment for Interest

question 87

Multiple Choice

Which of the following correctly describes the accounting treatment for interest payable?

• A) It is shown on the balance sheet as a current liability.
• B) It is shown on the income statement as an operating expense.
• C) It is shown on the balance sheet as a current asset.
• D) It is shown on the balance sheet as a long-term liability.

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Definitions:

Corporate Treasurer

A senior executive responsible for managing the company’s investments, capital structure, risk management, and liquidity, including handling corporate financing activities.

Corporate Controller

A senior executive responsible for overseeing the accounting operations and financial reporting of a company.

Capital Budgeting

The process by which a business evaluates and selects long-term investments that are worth more than their cost, considering potential risks and rewards.

Ultimate Responsibility

The highest level of accountability and duty that an individual or organization holds, particularly in the context of fulfilling job roles or task outcomes.