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

The correct option is B 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)

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