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      Question

      While accounting for ā€˜interest on capital’ provided

      by a firm, it will be recognized as which of the following?Ā 
      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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