1. A liability is measured in terms of its ___A. amount owed plus interest. ___B. current cash equivalent. ___C. historical cost. ___D. none of the other answers is correct.

2. Failure to make a necessary adjusting entry for accrued interest on a note payable would cause [hint -- try to tease out what the journal entry would be if you get stuck]. ___A. an understatement of liabilities and stockholders' equity. ___B. net income to be overstated and assets to be understated. ___C. net income to be understated and liabilities to be understated. ___D. an overstatement of net income, an understatement of liabilities, and an overstatement of stockholders' equity.

3. Wages of $20,000 accrued but not paid to employees at the end of 2021 should be recorded by the employer in a journal entry that includes a ___A. debit of $20,000 to Salaries Payable. ___B. credit of $20,000 to Cash. ___C. debit of $20,000 to Salaries Expense. ___D. debit of $20,000 to Cash.