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    Question

    While accounting for ‘interest on capital’ provided

    by a firm, it will be recognized as which of the following? 
    A Income Correct Answer Incorrect Answer
    B Expense Correct Answer Incorrect Answer
    C Asset Correct Answer Incorrect Answer
    D Liability Correct Answer Incorrect Answer
    E Capital Correct Answer Incorrect Answer

    Solution

    Interest paid is an expense while interest earned is revenue/income for the company.

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