How is loan installment included in balance sheet?



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If Balance Sheet is prepared for a particular day, then how can the loan installment, which is usually for a particular period, be included in the Balance Sheet? and How often is the Balance Sheet prepared?

1 Answer(s)


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Balance sheet is rarely prepared for 1 day. It is typically prepared for a quarter, 6 months or a year.

To be very accurate, accountants will start a B/S account to accrue the interest that has to be paid by breaking it down into daily interest accrued. And finally when the interest is paid, this account will be reset to 0.

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