Interest and accrued interest on fd
This query is : Resolved
26 May 2014
Dear Sir
I have an FD of Rs.6,97,620/-.
Rate of Interest is 8.75%.
Period : 21.12.13 to 21.12.14.
Bank provide me a interest certificate mentioning as follows :
Interest Amount : 15051/-
TDS Amount : 1692.60/-
Accrued Interest : 1875/-
Please advice me the Journal Entries need to charged in my books of Accounts.
I have an FD of Rs.6,97,620/-.
Rate of Interest is 8.75%.
Period : 21.12.13 to 21.12.14.
Bank provide me a interest certificate mentioning as follows :
Interest Amount : 15051/-
TDS Amount : 1692.60/-
Accrued Interest : 1875/-
Please advice me the Journal Entries need to charged in my books of Accounts.
26 May 2014
whether its a CO OR NON corporate or what is not mentioned.
Guest
Guest
(Expert)
27 May 2014
yes mention is that a co or not
27 May 2014
how does it matter whether it is co or non-co. the entries will depend on whether you follow accrual accounting or cash-basis.
27 May 2014
journal entry as under
interest accured a/c 1875
tds receivable a/c 1692.60
to interest on FDR a/c 16926
interest accured a/c 1875
tds receivable a/c 1692.60
to interest on FDR a/c 16926
28 May 2014
nikhil it will matter since professionals follow cash basis and for companies under sec 209 of old co act 1956 they need to follow accrual sysytem of accounts.
28 May 2014
who said professionals follow cash basis? you are generalizing...
28 May 2014
so u mean professionals follow accrual basis?
28 May 2014
yes many do..I do...that is why i said that the relevant basis is the accounting method and not the nature of the entity.
28 May 2014
so if u do then others should do the same? that u meant?
i have seen most of professionals follow cash sysytem wat abt them ? are they wrong?
i have seen most of professionals follow cash sysytem wat abt them ? are they wrong?
28 May 2014
no...no one is wrong. as an individual/firm etc have the option of choosing the accounting method.
therefore, I go back to my original argument that entry is based accounting method and not on the entity.
Even in case of individuals, certain incomes have to be necessarily be recognised on accrual basis such as Interest on cumulative deposit scheme of Government undertakings. Such interest has to be compulsorily offered to tax on accrual basis refer : No. 371 [F. No. 178/44/80-IT(A-I)], dated 21-11-1983.
therefore, I go back to my original argument that entry is based accounting method and not on the entity.
Even in case of individuals, certain incomes have to be necessarily be recognised on accrual basis such as Interest on cumulative deposit scheme of Government undertakings. Such interest has to be compulsorily offered to tax on accrual basis refer : No. 371 [F. No. 178/44/80-IT(A-I)], dated 21-11-1983.
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