Question

In balance sheet, accrued income is shown under which head of assets _______________.

• A. Intangible Assets
• B. Current Assets
• C. Fictitious Assets
• D. Tangible Assets

Answer 1

The correct option is B Current Assets

It may happen that certain items of income such as interest on loan, commission, rent, etc. are earned during the current accounting year but have not been actually received by the end of the same year. Such incomes are known as accrued incomes. The adjusting entry for accrued income is:

Accrued Income A/c Dr.

To Concerned Income A/c

The amount of accrued income will be added to the related income in the profit and loss account and the new account of accrued income will appear on the asset side under the head current assets of the balance sheet