Module 8_ Opening Exercise _ Schoology.pdf

Module 8_ Opening Exercise _ Schoology.pdf - 0/1 Question 1...

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0 /1 1 /1 0 /1 1 /1 1 /1 Question 1 The matching principle requires that interest expensenot 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. True False Try again! When the end of an accounting period occurs between the signing of a note payable and its maturity date, the expense recognition (matching) principle requires the borrower to record the accrued interest on the note. See the End-of-Period Interest Adjustment section in Chapter 11 of the textbook for more information. Question 2 Uncertainties from the development of new competing products are contingent liabilities. True False Correct! A contingent liability is a potential obligation that depends on a future event arising from a past transaction or event. It does not arise from a future uncertain event, but from a past transaction or event.
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