Value of 12% government securities as at 31 March 2021 was Rs. 85,000 which were purchased at that date at par. Additional 12% securities worth Rs. 50,000 were purchased on 31 March, 2022. Total interest debited to receipts and payments A/c during the year on the above securities is Rs. 9,000 calculate Accrued interest on 31 March, 2022.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Rs. 1,200
Interest is income of the year on accrual basis: the full interest earned is income, whether received or not. The new securities were bought only on the last day of the year, so they earn no interest for 2021-22.
Interest earned = Rs. 85,000 × 12% = Rs. 10,200
Less: interest received (debited to the Receipts and Payments A/c) = Rs. 9,000
Accrued interest on 31 March 2022 = Rs. 1,200
Rs. 10,200 is the total income for the year, not the part still to be received.
Note: This question is from the pre-rationalised NCERT book. The topic is not there in the latest NCERT book (2026-27), but it is still in the CUET 2026 syllabus, so do not skip it.
NCERT (Pre-rationalised edition):
NCERT (Pre-rationalised edition): |
