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how to record an interest PAID in balance sheet and income statement
another question
If contingent liability is remote, then how should this value be shown in income statement and balance sheet when it is already shown in trial balanceInterest paid does not appear in either the Statement of Profit or Loss or the Statement of Financial Position (we no longer call them Income Statement and Balance Sheet).
The Statement of Profit or Loss shows the interest expense for the year, the Statement of Financial Position shows any interest still owing at the end of the year.
A contingent liability will not appear in the trial balance – it is something that is considered at the end of the year. If it is remote then it will not be shown in either of the statements either, and will not even be disclosed by way of note.
I do suggest that you watch our free lectures – both of these points are dealt with in the lectures. Our free lectures are a complete course for Paper F3 and cover everything needed to be able to pass the exam well.
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