Answer Posted / chintan joshi
Accrual:
Accrual is one of the accounting concept. Expense or revenue
is booked as soon as they incur not when they are realized.
Accrual is also a provision of the cost.
Accrued Interest.
Best example which will clarify the concept from root.
Company A has taken a loan of Rs. 6,00,000 of which Rs.
60,000 interest is payable annually. Some book entry as follow.
on 31st March 2009.
Interest dr. 60,000
Bank cr. 60,000
Above practice is not accrual.
Following will explain why Accrual is called provision of
cost because?
Rs. 60,000 Interest will be reported in all 12 months
because amount of loan is utilized in all months. So per
month posting comes to 60,000/12 = 5,000.
On 1st April 2008.
Interest dr. 5,000
Accrued Interest cr.. 5,000
Same practice is followed upto March 2009. And when interest
is paid then accounting entry is like,
On March 2009.
Accrued Interest dr. Rs. 60,000
Bank cr. Rs. 60,000
| Is This Answer Correct ? | 19 Yes | 1 No |
Post New Answer View All Answers
I am Lavanya i have been selected in HR round in HP INVENT and i have Operation round as next round may i know what will they ask here and after this what is the next round?????
what is duties and responsibilities for clark working in sbi
Straight line method to using Indian company names
What is the procedure to become charted accountant in India now. Please answer this is urgent
Who will be called as consignee
what do you meant auction? what is F & o segment?
fd redeem interest and principal entry in tally
WHEN IN ADJUST. GIVEN THAT THERE IS VALUE OF RS...., OBSOLESCENCE STOCK INCLUDED IN CLOSING STOCK RS.......,WHAT IS THE PROPER WAY TO SHOW IN INCOME STATEMENT AND POSITION STATEMENT.
All shot cut key use in the tally software & it's uses
A company acquires new taxi fleets on 1April 2006 with intention to provide services during the World Cup period and thereafter dispose the taxis .The World Cup runs for three months to 30 June 2006.The company's year end is 30 June 2006.how do you account for taxis at initial recognition .
example of SOP
When we are raised a interstate invoice then which type invoice we are raised
what is mean by T and E cosept
I have complited my ERP course in FICO module. Now I want to work in ERP package. Please suggest me how I will apply for the organisation works in ERP environment.
What is the important of cash in a business unit
