The Matching Principle Requires That Interest Expense Not Be Accrued

question 142

True/False

The matching principle requires that interest expense not be accrued on a note payable until the note is paid, even if the end of an accounting period occurs between the signing of a note payable and its maturity date.

---

Definitions:

Equivalent Units

A concept in cost accounting used to equate units partially completed at the end of a period to units of finished goods.

Materials Cost

The total expense incurred by a company to purchase raw materials used in the production of goods or services.

Process Costing

A costing method used for homogeneous products, where costs are accumulated over a period and assigned to large numbers of identical units.

Cost Per Equivalent Unit

A calculation used in process costing that determines the cost associated with a single unit of output, adjusting for partial completion of units in the production process.