$6 %$ debentures account Rs. 3,00,000 debenture interest Rs. 6,000. What amount should be shown in profit & loss account?

Rs. 6,000

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Rs. 12,000

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Rs. 18,000

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None of the above

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Solution

The correct option is C Rs. 18,000
In accrual basis of Accounting the incomes are recorded when they are earned whether or not they are actually received. So, the interest that needs to be shown in the profit and loss account is 6% of Rs 3,00,000 = Rs 18000. Rs 6000 is received and Rs 12000 is outstanding which will be added to Rs 6,000.

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6% debentures account Rs. 3,00,000 debenture interest Rs. 6,000. What amount should be shown in profit & loss account?

$6 %$ debentures account Rs. 3,00,000 debenture interest Rs. 6,000. What amount should be shown in profit & loss account?