Interest expense is not:

a) Incurred on current liabilities.

b) Reported on the income statement.

c) Likely to fluctuate when sales change.

d) A fixed expense.

e) A factor in determining a company's borrowing risk.

The correct answer is letter "C": Likely to fluctuate when sales change.

Explanation:

Interest Expense is the cost of borrowing money. Usually, interest is paid on a credit card for some form of debt through a bank loan, mortgage, credit line or outstanding balance. The amount charged is equal to the interest rate times the outstanding balance. Interest payments are reported on an income statement as non-operating expenses.

Sales changes do not influence the interest expense.