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Define Accrual & what is accrual interest?
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Answer / 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 |
Answer / amar sawant
Accrual means an Outstanding. Accrual can be payable and
receivable.
Accrual interest means the interest which is yet to be
received or which is yet to be paid.
| Is This Answer Correct ? | 3 Yes | 1 No |
Answer / jksharma
Accrual means- monthly
Accrual interest means - total receive interest.
| Is This Answer Correct ? | 4 Yes | 6 No |
write about accounting concepts, & explain in detail
my boss (Managing Partner of a firm) promoted along with his wife a private limited company. he and she spent some Rs. 75,000/- (approx) for the promotion of the company. i know that they usually fall under the head of preliminary expenses. but after receiving the certification of incorporation of the company how shall i repay them to the promoters i.e. what is the accounting entry in the books (initial books of accounts) for the expenditure incurred. they have kept in hand 5,00,000/- each to meet the expenses and they were allotted shares of equal to the amount. can i allot shares for a consideration of cash from and excluding the preliminary expenses. can i take cash towards the share application money (being the cash more than Rs. 20,000/-) as the company has not opened a bank account yet. please give me the detailed answer with journal entries that can be entered in tally. thank you.
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