Accretion expense functions in the same way as interest expense.

Question

Quizplus · Accepted Answer

Accretion expense and interest expense both represent the gradual increase in the value of a liability over time. Accretion expense is often associated with long-term liabilities, such as bonds or loans, where the value of the liability increases over time due to the passage of time or the accumulation of interest. Similarly, interest expense represents the cost of borrowing money, which also increases over time as interest accrues. Therefore, both accretion expense and interest expense follow similar accounting principles and function in similar ways.

Accretion Expense Functions in the Same Way as Interest Expense