Financial Accounting II
Accrued interest is the amount of interest that has accumulated on a financial obligation, such as a loan or bond, but has not yet been paid. This concept is crucial in understanding how interest expense is recorded and calculated in financial statements, particularly when dealing with notes payable and other forms of debt. Accrued interest reflects the time value of money, emphasizing that interest costs are incurred over time, even if payment is deferred until a later date.
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