Interest and Dividend on Investment Assignment Help

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What is Interest and Dividend on Investment? – We put it simply for you!

Investment refers to a firm asset. Funds of a firm can be invested outside in securities, shares and debentures of other firms. The company will get dividends on interest and shares on loans, debentures and various other securities. Dividend/Interest that is obtained is obviously an income, and it will be posted in profit and loss account at credit side. If the dividend/interest has been obtained in cash during the year, an item will come at credit of Trial balance. It would be posted only in profit and loss account at the credit side.

Now let us tell you, in case interest on investment is due for specific months, it would be regarded as accrued income. The item would appear in adjustment, and will be displayed in final accounts at two places. The outstanding interest on investment is regarded as revenue of present year when it would be credited. The investment value will also rise with accrued interest amount. There will be debiting of investment account.

When it is an item of adjustment, Interest on investment is displayed at two spots – assets side of the Balance sheet and credit side of profit and loss account. When shown in assets side of Balance sheet, it will appear in Trial balance and would be added to the value of investment.

Interest on investment would be displayed only at credit end of profit and loss account, in case it is only an item from Trial balance. Let us offer you the best help with assignment services!

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