2
Question
The account of accrued income will be shown on _________ side.
The account of accrued income will be shown on _________ side.
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Solution
The correct option is B Credit side of profit & loss account
It may happen that certain items of income such as interest on loan, commission, rent, etc. are earned during the accounting year but have not been actually received by the end of the same year. Such incomes are known as accrued income. The adjusting entry for accrued income is:Accrued Income A/c Dr. To Concerned Income A/cThe amount of accrued income will be added to the related income in the profit and loss account on the credit side and the new account of accrued income will appear on the asset side of the balance sheet.
It may happen that certain items of income such as interest on loan, commission, rent, etc. are earned during the accounting year but have not been actually received by the end of the same year. Such incomes are known as accrued income. 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 on the credit side and the new account of accrued income will appear on the asset side of the balance sheet.
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