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interest accrued
differentiate between interest accrued but not due on borrowings and interset accrued and due on borrowings
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Interest accrued refers to mercantile system of accounting -
suppose you have borrowed Rs. 5,00,000/- for 5 years @ 10% interest, and interest is payable after completion of 5 years along with principle amount
Then at the end of each financial you have to provide interest of Rs. 50,000/- per year in you books - which is accrued
at the end of 5th year accrued liability will become due as per terms of contract
when we follow mercantile system we need to accrue for income/ exp even if they are not due.
in case of interest which is accrued for the year but is not required to be paid needs to be provided. and on the other hand interest which is accrued and also due to be paid is termed as int accrued and due
in case of interest which is accrued for the year but is not required to be paid needs to be provided. and on the other hand interest which is accrued and also due to be paid is termed as int accrued and due
explain according to class 12
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