Question

What should we enter in income and expenditure account if the below adjustment is given-
"Interest due but not paid Rs.xxx"

Answer 1

Explanation:

Given :

• "Interest due but not paid Rs.xxx"

To Find :

• Find the adjustment Account

Solution :

Whenever something is due but not yet paid is called outstanding expenses.

"Interest due but not paid Rs.xxx"

Iis Journal entry will be.

Interest. A/c dr. xxx

To outstanding interest A/c.. xxx

( Being interest due but not yet paid.)

More to know :

What is adjustment in final account ?

• Adjustment is the process of adjusting outstanding and prepaid expenses and incomes, depreciation of assets, bad debt, interest on capital and drawings etc., into the final accounts.

What is Outstanding Expenses ?

• Outstanding Expense is an expense which is due but has not been paid.

• An Expense becomes outstanding when the company has taken the benefit, but the related payment has not been made. Examples of Outstanding Expenses.