Which of the following occurs when accrued interest is accrued on a note payable at year-end?
A) Interest is accrued for the number of days the note is outstanding in the subsequent period.
B) Interest is accrued for the number of days the note is outstanding in the current period.
C) Interest is accrued for the total life of the note.
D) None of the above occurs.

Question

Quizplus · Accepted Answer

Interest is accrued for the number of days the note is outstanding in the current period to accurately reflect the expense incurred during that period, even if the payment will be made in a future period.

Which of the Following Occurs When Accrued Interest Is Accrued