Question

Amrit Nath Ashram has earned but not received the interest of Rs.$25,000$/- on securities. The journal entry is _____________.

• A. Interest Accured A/c Dr.$25000$
  To Interest A/c $25000$
• B. Interest A/c Dr.$25,000$
  To Interest
  Accured A/c $25000$
• C. Securities A/c Dr. $25000$
  To Interest A/c $25000$
• D. None of the above

Answer 1

Answer: (A)

Interest Accured A/c Dr.$25000$

To Interest A/c $25000$
Accrued Income is that income which is earned or due but not received. All such accrued income should be recorded in books of account on accrual concept basis.

Accounting entry will be as under:

Interest Accrued A/c Dr. ( To be shown in asset side of Balance Sheet)

To Interest A/c ( To be shown in Profit & Loss account as income)