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

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The expense recognition principle (or matching principle) requires that expenses be recognized when they are incurred, not when they are paid. Therefore, interest expense on a note payable should be accrued over the period the note is outstanding, even if the end of an accounting period falls between the signing of the note and its maturity date.

Even If the End of an Accounting Period Occurs Between