Question

recevied interest from bank 500​

Answer 1

Answer:

Out of 3 basic principle of accounting, the third one is:

“debit all expenses and losses, and Credit all gains and profits”

now, interest received or earned from bank is an income hence it must be credited, being a nominal account.

further, the interest credited by bank is generally not paid in cash to the receiver and credited in customers account. in the given instances, we will be receiving interest from bank, hence Bank will surely be debited.

therefore, the entry will be :

Bank Account Dr

To Interest Account

(Being interest receivable from bank)