If Global Data's Income Statement for 2018 Reports Interest Expense

question 114

Multiple Choice

If Global Data's income statement for 2018 reports interest expense of $25,200,then:

• A)Interest payable decreased by $16,800 in 2018.
• B)Interest payable increased by $16,800 in 2018.
• C)Interest payable at the end of 2018 amounts to $16,800.
• D)Either the amount reported in the income statement or the interest payment shown above must be incorrect.

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Definitions:

Perverse Incentive

A perverse incentive is an incentive that has an unintended and undesirable result that is contrary to the interests of the incentive makers.

Budget-gaming Problem

A situation in budgeting where individuals or departments manipulate figures or withhold information to secure budgetary advantages.

Compensation Schedule

A structured plan that outlines the timing and amounts of payments for work performed, damages, or other compensations.

Straight Line Pay

A compensation plan where employees are paid a fixed salary or wage that does not vary based on performance or sales.