Check sibling questions
Accounts and Finance
Step 3 Passing Book Closure Entries

It refers to those income which we have earned but due date of receiving them has not yet arised

Example

  • FD Made,not yet Matured
  • Loan given,interest not yet due

 

We book income on this as Accrued Income

 

Entry for Accrued Income

Asset Dr

            To Income

or

Accrued Income Dr

              To Income

 

Note:- Accrued Income is Current Asset

 

Accured income image.jpg

 

 

Assignment

Pass Entry assuming Company follows annual closing

1.Loan given to Mr Darshan Rs 500000 @ 14% p.a.for 6 months on 1 March

   Pass Entry for

  • Loan  Given
  • Interest Accrued on Loan as on 31 March
  • Balance interest
  • Loan Repaid

Company follows annual closing

View Answer

 

2. FD Made of 500000 @ 8% for 1 month on 29 March

Pass Entries for

  • FD Made
  • Interest Accrued on FD as on 31 March
  • Balance Interest
  • FD Repaid
View Answer

Transcript

Loan Given to Ajay & Co. 100 Lacs Interest Income 3 Lacs Loan Repaid 103 Lacs Option 1 Entry for Loan given Ajay & Co. 100 To Bank 100 Entry for Interest income Ajay & Co. 3 To Interest Income 3 Entry for loan repaid Bank A/c 103 To Ajay & Co. 103 Option 2 Entry for Loan given Ajay & Co. 100 To Bank 100 Entry for Interest income Interest Accrued 3 To Interest Income 3 Entry for loan repaid Bank A/c 103 Ajay & Co. 100 To Interest Accrued 3

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Davneet Singh

Davneet Singh is a graduate from Indian Institute of Technology, Kanpur. He has been teaching from the past 12 years. He provides courses for Maths and Science at Teachoo.