Q.Accrued interest on investment will be shown

Accrued interest on investment appears in both places — credit side of P&L and assets side of balance sheet — option (c).

What is accrued interest (accrued income)?

• It is interest that has been earned during the year but not yet received by the closing date.
• By the matching/accrual concept, income earned in the period must be recorded even if the cash has not come in.

Double effect of the adjustment

1. Profit & Loss Account — it is added to the interest already received and shown on the credit side as income earned. …