Question

'Interest earned but not received' should be classified as _____________.

• A. Accrued asset
• B. Accrued liability
• C. Prepaid expense
• D. Unearned revenue

Answer 1

The correct option is A Accrued asset

Interest that is due to the company at the end of the accounting period but not yet received is classified as accrued interest receivable.

To make the adjusting journal entry, debit the current assets account and credit income received on the income statement with the accrued amount due.