Which of the following portions of a mortgage loan is recorded as a liability on the balance sheet?
A) Interest only
B) Sum of the interest paid and the outstanding balance
C) Sum of the interest due and the outstanding balance
D) Outstanding principal portion only
E) Principal portion and interest paid

Question

Quizplus · Accepted Answer

The outstanding principal portion of a mortgage loan is recorded as a liability on the balance sheet. This is because the outstanding principal is the amount of money that still needs to be paid back and is considered a debt or liability of the borrower. The interest portion of the loan is recorded separately and may be listed as an expense on the income statement rather than a liability on the balance sheet.

Which of the Following Portions of a Mortgage Loan Is