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What accounting concept requires a company to accrue interest expense on a Note payable?

What accounting concept requires a company to accrue interest expense on a Note payable?
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Answer #1

The concept that requires a company to accrue Interest expense on a Notes Payable is the ACCRUAL CONCEPT of accounting.

According to this concept, all revenues and expense earned or incurred, are to be recorded in the books in the period, whether the cash has been received or paid or not.

Thats why, even though interest on Notes Payable is paid at maturity, interest expense for each period is accrued and recorded even when the same is not paid during that paid in cash.

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