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The Checking Account of a Small Healthcare Business Pays Interest

Question 1

Multiple Choice

The checking account of a small healthcare business pays interest each day the balance in the account exceeds $1,000. The bank credits the account with the accumulated interest at the end of each month. How should the interest income be posted?


A) As a credit to Cash and a debit to Interest Income
B) As a credit to Interest Income and a debit to Cash
C) As a credit to Miscellaneous Income
D) As a credit to Short-Term Investments

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