Hemchand Kohli (Accountant) (889 Points)
22 March 2010if we following Cash Basis Accounting System
the can we charged interest on Unsecured loan in Profit & Loss A/c at the end eventhough we have not paid interest.
for Eg. Intt on Unsecured Loan is Rs. 15,000/- at the end as on 31-03-2010 if we don't pay can we treat as expense in F.Y. 2009-10 and we pay intt in April 2010
Chintan Vasa
(CA Final Student M.Com)
(1241 Points)
Replied 22 March 2010
In cash basis of accounting you can record only those expense for which you have paid. In your given case you can charge interest in p/l account only if actual payment is made, otherwise its improper to record.
CA Dhiraj Ramchandani
(CA, M. com)
(10823 Points)
Replied 22 March 2010
Dear, how can u show such expense in books under CASH SYSTEM, if u r not actually paying it???
U can show that expense in FY 10-11 only
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