31 August 2013
Comment on following: A Company has given fixed deposit of Rs 1, 00,000 to a Bank for one year at 10% pa. On 01-07-2011. The Accountant does not take interest in to account of 2011-12 on the plea that deposit has not yet matured
31 August 2013
Books of accounts are to be maintained on accrual basis.
As per accrual basis incomes and expenses are required to be accounted as and when they arise and NOT when it is actually received.
Interest on FDR accrues on a quarterly basis. So it is to be accounted on a quarterly basis as per FOrm 16A received from the bank.
Further, if TDS is not deducted by bank, then interest is required to be accounted at the end of the year on the basis of the interest certificate received from the bank.
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