the item interest accrued on investments appears in the balance sheet of a company under the cetegory of
Answers
Answer:
Definition of Accrued Interest
Accrued interest is the amount of loan interest that has already occurred, but has not yet been paid by the borrower and not yet received by the lender.
Under the accrual basis of accounting, the amount of accrued interest is to be recorded with accrual adjusting entries by the borrower and the lender before issuing their financial statements.
The borrower's adjusting entry will debit Interest Expense and credit Accrued Interest Payable (a current liability). The lender's adjusting entry will debit Accrued Interest Receivable (a current asset) and credit Interest Revenue (or Income).
Answer:
The item interest accrued on investments appears in the balance sheet of a company under the category of the current assets.
Explanation:
- A current assets will have all assets related to the company that will be accepted to be sold or can be used for business standard operations for the next year.
- It represent the sold, consumed, used or exhaustion over a standard business operations.
- They appear on the balance sheet of the company, it requires one of the financial statement that will of completed in a span of the completed year.
- The current assets are related to cash equivalents, inventory of the stock, receivable, prep paid liabilities, other assess of the liquid.
- The other name of the current assets is called as current accounts.
- Uses of the current assets:
1) The payment made towards bill and loans will become due at the end of every month. The management will be ready to spend the cash which is necessary.
2) Current assets total is importance of management of a company with daily operations related to the business.
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