Question

intrest loan is show in department trading a/c or ??​

Answer 1

Answer:

Explanation:

In order to arrive at the balance sheet of a business, one needs to prepare the trading account and profit and loss ... On the credit side, Discount received, Commission received, Profit on sale of assets and more appear.

Answer 2

ANSWER :

Usually while preparing the Final Accounts from the Trial Balance, interest paid on loan taken by the business from outsiders, which appears in the Trial Balance is shown in the Debit side of the Profit and Loss Account.

The accounting treatment of interest on loan taken by a business from outside at the time of preparation of the Final Account will be depend on whether the item appears inside the Trial Balance or as an adjustment.

• ❖ When the interest on loan becomes due but not paid, i.e, outstanding interest on loan appears in the Trial Balance, it is shown in the Liabilities side of the Balance Sheet as an outstanding liability.

• ❖ When outstanding interest on loan appears as an adjustment, it will be added to the amount of interest on loan on the debit side of the Profit and Loss Account as well as the outstanding amount of interest will ge added to Loan Account on the Liabilities side of the Balance Sheet.