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12. What type of account is interest income? b. c. d. revenue expense Owner's equity 13. True-False (A-3) Cash is never used in preparing adjusting 14. Paida utilities bull immediately on receipt. What effect does this entry have on liabilities? increase decrease ne effect more information is needed 75. Gross profit equals the difference between: a. net sales and cost of goods sold. b. net sales and cost of goods sold plus operating expenses. c. net income and operating expenses. d. net sales and operating expenses. 16. Which of the following transactions will NOT result in the recognition of an expense? a. Accrued salaries at the end of a period. b. Interest accrued on a bank loan. c. Expiration of prepaid insurance. d. Drawings of cash by the sole proprietor of a business