PRC-1 · Chapter 4 · Question 78 of 100
A business earns interest on a bank deposit of Rs. 500,000 at a rate of 6% per annum. Interest is credited by the bank half-yearly on June 30 and December 31. If the bank has not yet credited the December interest by year-end, what is the accrued interest income?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Rs. 15,000
Explanation
The unrecorded interest is for the 6-month period from July to December. Rs. 500,000 x 6% x (6/12) = Rs. 15,000.
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