An adjustment that must be made for the interest on a note payable that is incurred during the period but not paid or recorded because payment is not due is called:
A)Notes Payable.
B)Accrued Interest Income.
C)Accrued Interest Expense.
D)Discount Payable Liability.

Question

Quizplus · Accepted Answer

When interest on a note payable is incurred during a period but not paid or recorded because of it not being due, an adjustment called "Accrued Interest Expense" must be made. This adjustment is required to ensure that the financial statements accurately reflect the company's financial position and performance, as it recognizes the interest expense that has been incurred but not yet paid. Therefore, option C is the correct choice.

An Adjustment That Must Be Made for the Interest on a Note