An event that does not involve an exchange, for example accrued interest expense, does not need to be recorded in the accounting system.

Question

Quizplus · Accepted Answer

Accrued interest expense is an event that needs to be recorded in the accounting system even though it does not involve an exchange of money at the time of occurrence. It represents an obligation of the company to pay interest in the future, and therefore should be recorded as an expense and a liability.

An Event That Does Not Involve an Exchange, for Example