Which of the following terms does not describe an interest rate used to calculate the interest expense on the income statement?
A)Nominal rate
B)Market rate
C)Effective rate
D)Yield rate

Question

Quizplus · Accepted Answer

The nominal rate, also known as the stated or coupon rate, does not directly describe an interest rate used to calculate the interest expense on the income statement. Instead, the effective rate, market rate, or yield rate, which take into account the actual cost of borrowing, are used for such calculations.

Which of the Following Terms Does Not Describe an Interest