Indicate Whether Each of the Following Statements Is True or False

question 11

Short Answer

Indicate whether each of the following statements is true or false.
_____ a) An eight month, 6% note for $20,000 will require the issuer to pay $1,200 in interest.
_____ b) Interest expense is not considered an operating expense on the income statement.
_____ c) Payment of interest is considered an operating activity on the statement of cash flows.
_____ d) Payment of interest on a one-year note due on March 1 will include a reduction in liabilities.
_____ e) The adjusting entry to recognize interest expense is an asset use transaction.

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Definitions:

Computer Software

The collection of programs, procedures, and related data that instruct a computer what to do.

Employee Disengagement

A condition in which workers are emotionally disconnected from their work, leading to lower productivity, satisfaction, and morale.

Leniency Error

A bias in performance appraisals where the evaluator rates an employee more favorably than the employee's performance justifies.

Lopsided Distribution

A statistical distribution characterized by an asymmetry where values are more spread out on one side than the other.