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.

Question

Quizplus · Accepted Answer

Interest payable is a current liability that represents the interest expense that has been incurred but has not yet been paid. It is recorded on the balance sheet as a current liability because it is expected to be paid within the next year.

Which of the Following Correctly Describes the Accounting Treatment for Interest