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Indicate Whether Each of the Following Is True or False

Question 60

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Indicate whether each of the following is true or false.Perez Company borrowed money from its bank in July Year 1.The accrual of interest on the loan at the end of Year 1:

Premises:
involves recognition of interest expense.
reduces cash flows.
does not affect income for Year 1.
involves recognition of a liability.
records a cash payment for interest.
Responses:
True
False

Correct Answer:

involves recognition of interest expense.
reduces cash flows.
does not affect income for Year 1.
involves recognition of a liability.
records a cash payment for interest.
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