Final answer:
True, the matching principle requires that accrued interest on notes receivable must be recorded in the same accounting period as the income is earned.
Step-by-step explanation:
The statement that the matching principle requires that accrued interest on outstanding notes receivable be recorded at the end of each accounting period is true. The matching principle is a fundamental accounting concept that dictates that expenses should be recorded in the same accounting period as the revenues they helped to generate. In the case of notes receivable, interest income is earned over the period of the loan, and therefore, the accrued interest should be recorded as income in the same period it is earned, even if it is not yet received in cash.