20) A transaction has been recorded in the journal of Davis Company as follows:

Interest expense	800
Interest payable		800

Which of the following describes the effect of this transaction on the companys financial statements?

A) Decreases liabilities B) Increases liabilities C) Increases stockholders equity D) Decreases assets

21) Callahan Corporation recorded an adjusting entry using T-accounts as follows:

Interest Receivable
75

Interest Revenue
	75

Which of the following reflects how this adjustment affects the company's financial statements?

	Assets	=	Liab.	+	Stk. Equity	Rev.		Exp.	=	Net Inc.	Stmt of Cash Flows
A.	+	=	+	+	NA	NA		NA	=	NA	+FA
B.	+	=	NA	+	+	+		NA	=	+	NA
C.	+	=	NA	+	+	+		NA	=	+	+OA
D.		=	NA	+	NA			NA	=		NA

A) Option C B) Option B C) Option A D) Option D

22) Financial accounting information is usually less detailed than managerial accounting information.

true false

23) The value created by a business is created by its assets.

true false