Practice prompt · Q:statement-presentation-comprehensive-income-and-disclosure/practice-interest-expense

Interest expense

Place borrowing cost in a multiple step statement.

Updated Sep 13, 2026 Review due Dec 13, 2026

Practice

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A company borrows money to finance its operations. Where does interest expense usually appear in the multiple-step statement used in Chapter 6?

Choose the best answer. a Below operating income and before pretax income b Within cost of revenue c Within OCI d After income tax expense

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Answer: a

Interest is a financing cost. The chapter’s operating subtotal excludes it, but pretax income includes it.