Why is Interest A/c debited and Bank a/c credited when
interest is charged by the bank??
Here I assume Its an expenses so interest is debited but I
don't understand why bank is credited?? Bank is a personal
account. Please explain this doubt?
- 2 Answers
- 3073 Views
- I also Faced
- E-Mail Answers
Answer Posted / tripti sen
1.bank is real a/c and company a/c in bank is a personal a/c
2.now let i clear u rules of real account and personal ac
real a/c:- debit was come& credit was goes out
personal ac :- debit the receiver & credit the giver
In the book of bank:
Interest a/c..........Dr
To company or party a/c
| Is This Answer Correct ? | 1 Yes | 0 No |
Post New Answer View All Answers
cheque deposit is a contra entry?
HOW CAN WE CONVERT IN CFT TO A ROUND LOG??
What does the standard journal entry includes?
8. What is the difference between: a. Direct Costing Method and Absorption Method. b. Fixed Cost and Variable Cost.
If a promoter has purchased an asset on behalf of the company before the incorporation of the same then what will be the accounting treatment to record the asset in the books of company
Case Study: Deepak Hand tools Private Limited DHPL is a small sized firm manufacturing hand tools. It manufacturing plan is situated in Haryana. The company’s sales in the year ending on 31st March 2007 were Rs.1000 million (Rs.100 crore) on an asset base of Rs.650 million. The net profit of the company was Rs.76 million. The management of the company wants to improve profitability further. The required rate of return of the company is 14 percent. The company is currently considering an investment proposal. One is to expand its manufacturing capacity. The estimated cost of the new equipment is Rs.250 million. It is expected to have an economic life of 10 years. The accountant forecasts that net cash inflows would be Rs.45 million per annum for the first three years, Rs.68 million per annum from year four to year eight and for the remaining two years Rs.30million per annum. The plant can be sold for Rs.55 million at the end of its economic life. The company would need to raise debt to the extent of Rs.200 million. The company has the following options of borrowing Rs.200 million: a. The company can borrow funds from a nationalized bank at the interest rate of 14 percent for 10 years. It will be required to pay equal annual installment of interest and repayment of principal. b. A financial institution has offered to lend money to DHPL at 13.5 per annum but it needs to pay equated quarterly installment of interest and repayment of principal. Questions: 1. Should the company expand its capacity? Show the computation of NPV 2. What is the annual installment of bank loan? 3. Calculate the quarterly installments of the Financial Institution loan 4. Should the company borrow from the bank or from the financial institution?
Do you have any professional experience in this field?
What is a cpa?
What would be the entry at the time of Generating Tution Fee Challan for Advance fees. (e.g In the Month of April, Fees of June and July in being asked to pay by school to their students?,
what is cost unit n what is cost sheet?
What is bad debt expense?
Who is considered the father of accounting?
as muthoot finance is a finance co,so what would be pattern of asking in relation to finance and a/c question?will it be basic or general or it would be market related situation?plz if help me anybody...
Is the shadow balance present in bank account always credited or bank may reverse it as well?
lic (life insurance corporation)how much he or she as to deduct income tax on his gross annual salary. please give with examples
