ACCRUED INTEREST

What is meaning of accrued?

Even though it may not have been received in cash, but your FD value remains same?

If no, how can your BS be correct?

So, the interest is accrued every quarterly to FD, thereby increasing the value of FD, and as such you have to offer the accrued interest in ITR. To that extent the principal amount of FD will increase in assets side of BS.