If interest payment dates associated with notes receivable do not coincide with a company's fiscal year-end, the company must accrue the amount of interest revenue earned as of the fiscal year-end even though it is not receiving the interest payment on this date.

Question

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Accruing interest revenue ensures that the financial statements reflect all earned income up to the fiscal year-end, adhering to the accrual accounting principle.

If Interest Payment Dates Associated with Notes Receivable Do Not