On February 1,2018,Middleton Corp

question 163

Multiple Choice

On February 1,2018,Middleton Corp.lends cash and accepts a $1,000 note receivable that offers 12% interest and is due in six months.How much interest revenue will Middleton Corp.report during 2018?

• A)$120.
• B)$240.
• C)$100.
• D)$60.

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Definitions:

Accrual

An accounting method that records revenues and expenses when they are incurred, regardless of when cash is exchanged.

Accrual

The accounting method that records revenues and expenses when they are incurred, regardless of when cash transactions occur.

Accounting Cycle

The process used by entities to analyze and record transactions, adjust the records at the end of the period, prepare financial statements, and prepare the records for the next cycle.

Adjusted Trial Balance

A list of all accounts and their balances after adjustments have been made.