A company invests excess cash in a certificate of deposit.At the end of an accounting period before the CD matures,the company will recognize interest expense.

Name: A company invests excess cash in a certificate of deposit.At the end of an accounting period before the CD matures,the company will recognize interest expense.
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Question

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Interest from a certificate of deposit (CD) is recognized as interest income, not interest expense, because the company earns interest on the investment, rather than incurs cost.

A Company Invests Excess Cash in a Certificate of Deposit