Bos 28155 CP 7

7
Average Due Date and

Account Current
UNIT 1: AVERAGE DUE DATE
BASIC CONCEPTS AND STEPS TO SOLVE THE PROBLEMS
Interest
Average Due Date is one on which the net amount payable can
calculation on
be settled without causing loss of interest either to the borrower
basis
of
or the lender.
Average Due
Date
When the amount is lent in various instalments then average due
date can be calculated as:
Total of [Amount No. of days from
Average due date = Base date
base date to due date]

Total amounts
When interest is chargeable on drawings, and drawings are on

different dates, interest may be calculated on the basis of Average
Due Date of drawings.
Average due date in a case where the amount is lent in one
instalment and repayment is done in various instalments will be:
Sum of days/months/Years from the date
of lending to the date of repayment of
Average due date = Date of Loan + each
instalment
Number of instalments
Question 1
Define Average Due Date. List out the various instances when Average Due Date can be
used.
The Institute of Chartered Accountants of India
Average Due Date and Account Current
7.2
Answer
In business enterprises, a large number of receipts and payments by and from a single
party may occur at different points of time. To simplify the calculation of interest
involved for such transactions, the idea of average due date has been developed.
Average Due Date is a break-even date on which the net amount payable can be settled
without causing loss of interest either to the borrower or the lender.
Few instances where average due date can be used:
(i)
Calculation of interest on drawings made by the proprietors or partners of a

business firm at several points of time.
(ii) Settlement of accounts between a principal and an agent.

(iii) Settlement of contra accounts, that is, A and B sell goods to each other on
different dates.
Question 2
E owes to F the following amounts:
` 5,000 due on 10th March, 2011

` 18,000 due on 2nd April, 2011
` 60,000 due on 30th April, 2011
` 2,000 due on 10th June, 2011
He desires to make the full payment on 30th June, 2011 with interest at 10% per annum after the
average due date. Find out the average due date and the amount of interest.
Answer
Calculation of Average Due Date
Taking 10th March, 2011 as the base date.
Due date
2011
10th
2nd
March
April
No. of days from the base

date i.e. 10th March, 2011
Amount
Product
5,000
18,000
23
4,14,000
30th
April
60,000
51
30,60,000
10th
June
2,000
92
1,84,000
85,000
36,58,000
7.3
Accounting
Average due date=Base date+ Days equal to
= 10th March +
Total of products
Total amount
R`36,58,000
` 85,000
= 10th March + 43 days =22nd April, 2011

Interest amount: Interest can be calculated on ` 85,000 after 22nd April, 2011 to 30th June,
2011 at 10% p.a. i.e. interest on ` 85,000 for 69 days at 10%.
=` 85,000 x 10/100 x 69/365 = ` 1,607 (approx.)

Question 3
Calculate average due date from the following informations:
Date of bill
1st
March, 2011
Term
Amount (`)
2 months
4,000
10th March, 2011
3 months
3,000
5th April, 2011
2 months
2,000
20th April, 2011
1 months
3,750
10th
2 months
5,000
May, 2011
Answer
(Taking 4th May, 2011 as the base date)
Date of bill
Term
Due date
Amount
`
2011
1st
March
10th
5th
March
April
20th
10th
April
May
No. of days from

the base date i.e.
May 4, 2011
Product
2011
2 months
4th
3 months
13th
May
2 months
8th
1 month
23rd
2 months
13th
4,000
3,000
40
1,20,000
2,000
35
70,000
May
3,750
19
71,250
July
5,000
70
3,50,000
June
June
17,750
Total of products
Total amount
6,11,250
= 4th May, 2011 +
7.4
R` 6,11,250
= 4th May, 2011 + 35 days = 8th June, 2011
17,750
Question 4
A lent ` 25,000 to B on 1st January, 2011. The amount is repayable in 5 half-yearly
installments commencing from 1st January, 2012. Calculate the average due date and interest
@ 10% per annum.
Answer
Calculation of sum of periods from the date of each transaction:
1st payment is made after 12 months from the date of loan.

2nd payment is made after 18 months from the date of loan.
3rd payment is made after 24 months from the date of loan.
4th payment is made after 30 months from the date of loan.
5th payment is made after 36 months from the date of loan.
Sum of the months =120
Average due date =
Date of loan +
Sum of months from 1st January, 2011 to the date of each installment
Number of installments
120 months
=1st January, 2011 +
5
=1st January, 2011+ 24 months
=1st January, 2013
Interest = ` 25,000 x 10/100 x 2 years

=` 5,000
Question 5
Calculate average due date from the following information:
Date of bill
Term
16th August, 2010
3 months
3,000
20th October, 2010
60 days
2,500
14thDecember, 2010
2 months
2,000
24th January, 2011
60 days
1,000
06th
2 months
1,500
March, 2011
Amount (`)
7.5
Accounting
Answer
(Taking November 19, 2010 as the base date)
Date of bill
Term
Due date
(including 3
grace days)
Amount
16th August, 2010
3 months Nov. 19, 2010
3,000
20th
60 days
October, 2010
No. of days Product (no.

from the base
of days x
date
amount)
Dec. 22, 2010
2,500
33
82,500
14th December, 2010 2 months Feb. 17, 2011
2,000
90
1,80,000
24th January, 2011
60 days
1,000
129
1,29,000
06th March, 2011
2 months May 09, 2011
1,500
171
2,56,500
March 28 , 2011
10,000
6,48,000
Total of products
Total amount
= November 19, 2010 +6,48,000/10,000

= November 19, 2010 + 65 days = January 23, 2011
Question 6
A trader allows his customers, credit for one week only beyond which he charges interest
@ 12% per annum. Anil, a customer buys goods as follows:
Date of Sale/Purchase
January 2, 2012
January 28, 2012
February 17, 2012
March 3, 2012
Amount (`)
6,000
5,500
7,000
4,700
Anil settles his account on 31st March, 2012. Calculate the amount of interest payable by Anil
using average due date method.
Answer
Let us assume 9th January, 2012 to be the base date:

Date of
Sale
Due date of
payment
Amount (`)
No. of days from

9th January, 2012
Product
Jan. 2
Jan. 9
6,000
Jan. 28
Feb. 4
5,500
26
1,43,000
7.6
Feb. 17
Feb. 24
7,000
46
3,22,000
March 3
March 10
4,700
61
2,86,700
23,200
Average Due date = Base date +
= 9th January, 2012 +
7,51,700
Sum of Pr oduct
Sum of amount
7,51,700
= 33days
23,200
33 days from 9th January, 2012 = 11th February, 2012

Thus, average due date = 11th February, 2012
No. of days after 11th February, 2012 to 31st March, 2012 = 49 days.
Interest payable by Anil on ` 23,200 for 49 days @ 12% per annum
= ` 23,200 x
12
49
x
= ` 372.72
366 100
Question 7
From the following details find out the average due date:
Date of Bill
29th January, 2012
20th March, 2012
12th July, 2012
10th August, 2012
Usance of Bill
1 month
2 months
1 month
2 months
Amount (`)
5,000
4,000
7,000
6,000
Answer
(Taking 3rd March, 2012 as base date)
Date
2012
29 th
of
January
20 th March
bill
Term
1 month
2 months
Due
2012
date
Amount
3 rd
March 1
(`)
5,000
4,000
23 rd May
No. of days from

the base date i.e.
3 rd March,2012
(`)
0
81
Product
(`)
0
3,24,000
Bill dated 29th January, 2012 has the maturity period of one month and since 2012 is a leap year 29 th
February, 2012 shall be the maturity date and due date would be 3rd March, 2012 (after adding 3 days
of grace).
1
7.7
Accounting
12 th July
10 th August
1month
2 months
Average due date
14 th Aug. 2
13 th Oct.
7,000
6,000
22,000
164
224
11,48,000
13,44,000
28,16,000
Sum of Products
Sum of Amounts
Base date + Days equal to
3rd March, 2012 +
3rd March, 2012 + 128 days = 9th July, 2012
28,16,000
22,000
Question 8
A and B are partners in a firm and share profits and losses equally. A has withdrawn the
following sum during the half year ending 30th June 2012:
Date
Amount (`)
January 15
5,000
February 10
4,000
April 5
8,000
May 20
10,000
June 18
9,000
Interest on drawings is charged @ 10% per annum. Find out the average due date and
calculate the interest on drawings to be charged on 30th June 2012
Answer
Date
January 15
February 10
April 5
May 20
June 18
Calculation of Average due date

(Base Date 15th Jan, 2012)
Amount
No. of days
from base date
`
5,000
0
4,000
26
8,000
81
10,000
126
9,000
155
36,000
Product
`
0
1,04,000
6,48,000
12,60,000
13,95,000
34,07,000
2 Bill dated 12 th July, 2012 has the maturity period of one month, due date (after adding 3 days of
grace) falls on 15th August, 2012. 15th August being public holiday, due date would be preceding date
i.e. 14th August, 2012.
Average due date
= Base date +
= 15th Jan +
7.8
Total product
days
Total amount
34,07,000
days
36,000
= 15th Jan + 95 days = 19th April, 2012

Number of days after 19th April, 2012 to 30th June, 2012 = 72 days
Interest on drawings after 19th April to 30th June @10%:
= ` 36,000
72 10
= ` 708
366 100
Hence, interest on drawings ` 708 will be charged from A on 30th June, 2012.
Question 9
Mr. Black accepted the following bills drawn by Mr. White:
Date of Bill
09-03-2011
16-03-2011
07-04-2011
18-05-2011
Period
4 months
3 months
5 months
3 months
Amount (`)
4,000
5,000
6,000
5,000
He wants to pay all the bills on a single date. Interest chargeable is @ 18% p.a. and
Mr. Black wants to earn ` 150 on account of interest payment. Find out the date on which he
has to effect the payment to earn interest of ` 150. Base date to be taken shall be the earliest
due date.
Answer
Calculation of Average Due Date taking base date as 19.06.2011
Date of Bill
Period
Maturity date
09.03.2011
16.03.2011
07.04.2011
18.05.2011
4 months
3 months
5 months
3 months
12.07.2011
19.06.2011
10.09.2011
21.08.2011
Average due date = Base date +
No. of days from the

base date
23
0
83
63
Total of pr oduct
Total of amount
Amount
(`)
4,000
5,000
6,000
5,000
20,000
Products
92,000
0
4,98,000
3,15,000
9,05,000
7.9
Accounting
= 19.06.2011 +
9,05,000
= 19.06.2011 + 46 days = 4th August, 2011.
20,000
Computation of date of payment to earn interest of ` 150
Interest per day = [` 20,000 x (18/100)] / 365 days

= ` 3,600/365 = ` 10 per day (approx.)
To earn interest of ` 150, the payment should be made 15 days (` 150 / ` 10 per day) earlier
to the due date. Accordingly, the date of payment would be:
Date of payment to earn interest of ` 150 = 4th August, 2011 15 days = 20th July, 2011.
Question 10
T owes to K the following amounts:
` 7,000 due on 15th March, 2012

` 12,000 due on 5th April, 2012
` 30,000 due on 25th April, 2012
` 20,000 due on 11th June, 2012
He desires to make the full payment on 30th June, 2012 along with interest @ 10% per annum
after the average due date. Find out the average due date and the amount of interest. Amount of
interest may be rounded off to the nearest rupee.
Answer
Calculation of Average Due Date taking 15th March, 2012 as the base date
Due date
Amount
No. of days from the base

date i.e. 15th March, 2012
Product
`
15th March, 2012
5th April, 2012
25th April, 2012
11th June 2012
Average due date
7,000
12,000
30,000
20,000
69,000
0
21
41
88
= Base date + Days equal to

= 15th March, 2012 +
Total of products
Total amount
32,42,000
69,000
= 15th March, 2012 + 47 days =1st May, 2012
0
2,52,000
12,30,000
17,60,000
32,42,000
7.10
Interest amount: Interest can be calculated on ` 69,000 after 1st May, 2012 to 30th June,
2012 at 10% p.a. i.e. interest on ` 69,000 for 60 days at 10% p.a. =` 69,000 x 10/100 x
60/366 = ` 1,131 (approx.)
Note: Alternatively, interest can be calculated on the basis of 365 days instead of 366 days.
In such a case, interest amount will be ` 1,134 (approx.) instead of ` 1,131.
Question 11
The following transactions took place between Thick and Thin. They desire to settle their
account on average due date.
Purchases by Thick from Thin
(`)
9th July, 2013
7,200
14th August, 2013
12,200
Sales by Thick to Thin
(`)
15th July, 2013
18,000
31st August, 2013
16,500
Calculate Average Due Date and the amount to be paid or received by Thick.
Answer
Computation of products for Thicks payments
(Taking 9.7.13 as base date)
Due Date
Amount
No. of days from base date to due

date
Product
`
7,200
12,200
19,400
9.7.13
14.8.13
`
0
36
0
4,39,200
4,39,200
Computation of products for Thins payments (Base date = 9.7.13)

Due Date
Amount No. of days from base date to due

date
Product
`
15.7.13
31.8.13
18,000
16,500
34,500
`
6
53
Excess of Thins products over Thick [9,82,500-4,39,200]
1,08,000
8,74,500
9,82,500
5,43,300
7.11
Accounting
Excess of Thins amounts over Thick [34,500-19,400]

Number of days from base date to date of settlement is =
15,100
5,43,300
= 36 days (approx.)
15,100
Hence, the date of settlement of the balance amount is 36 days after 9th July, i.e. 14th August.
Thus, on 14th August, 2013, Thin has to pay ` 15,100 to Thick.
Question 12
Kishanlal has made the following sales to Babulal. He allows a credit period of 10 days
beyond which he charges interest @ 12% per annum.
Date of Sales
Amount (`)
26.05.14
12,000
18.07.14
18,000
02.08.14
16,500
28.08.14
9,500
09.09.14
15,500
17.09.14
13,500
Babulal wants to settle his accounts on 30-9-2014. Calculate the interest payable by him using
Average Due Date (ADD). If Babulal wants to save interest of `588, how many days before
30.9.2014 does he have to make payment? Also find the payment date in this case.
Answer
Calculation of Average Due date (Taking 05th June as the base date)
Date
26.05.2014
18.07.2014
02.08.2014
280.8.2014
09.09.2014
17.09.2014
Average due date
Due Date
05.06.2014
28.07.2014
12.08.2014
07.09.2014
19.09.2014
27.09.2014
= 5.6.14 +
Amount No. of days from

` Base date
12,000
0
18,000
53
16,500
68
9,500
94
15,500
106
13,500
114
85,000
61,51,000
85,000
= 5.6.14 + 72 days (app.) = 16.08.2014
Product
`
0
9,54,000
11,22,000
8,93,000
16,43,000
15,39,000
61,51,000
7.12
Interest if settlement is done on 30.9.14

85,000 x 12% x
45
= ` 1,258 (approx.)
365
If Babulal wants to save interest of ` 588, then he has to make the payment
following days before 30.09.2014:
= 588/1258 X 45 days (16.08.2014 to 30.09.2014) = 21 days earlier
Payment date in the above case will be 09.09.2014.
Exercise
1.
Calculate Average Due date from the following information:

Date of the bill
Term
Amount
`
6,000
5,000
4,000
2,000
3,000
August 10, 2010

3 months
October 23, 2010
60 days
December 4, 2010
2 months
January 14, 2011
60 days
March 08, 2011
2 months
(Hints: Average due date = January 19, 2011.)
2. Hari owes Ram ` 2,000 on 1st April, 2011. From 1st April, 2011 to 30th June, 2011 the following further
transactions took place between Hari and Ram:
April 10 Hari buys goods from Ram for ` 5,000
May 16 Hari receives cash loan of ` 10,000 from Ram
June 9 Hari buys goods from Ram for ` 3,000
Hari pays the whole amount, together with interest @ 15% per annum, to Ram on 30th June, 2011.
Calculate the interest payable on 30th June, 2011 by the average due-date method.
(Hints: Average due date =6th May, 2011; Interest= ` 452 (approx.))
3. Mr. Green and Mr. Red had the following mutual dealings and desire to settle their account on the
average due date:
Purchases by Green from Red:
Rs.
6th January, 2011
2nd February, 2011
31st March, 2011
Sales by Green to Red:
6th January, 2011
6,000
2,800
2,000
6,600
9th March, 2011

2,400
th
500
20 March, 2011
You are asked to ascertain the average due date.
(Hints: On 20th February, 2011, Green has to pay Red ` 1,300 to settle the account)
7.13
Accounting
UNIT-2 : ACCOUNT CURRENT

BASIC CONCEPTS
Account
Current
When interest calculation becomes an integral part of the account.

The account maintained is called Account Current.
Some examples where it is maintained are:
Frequent transactions between two parties.
Goods sent on consignment
Frequent transactions between a banker and his customers
There are three ways of preparing an Account Current :
With the help of interest tables
By means of products
By means of products of balances
Question 1
On 1st January, 2011 Suris account in Puris ledger showed a debit balance of ` 2,500. The
following transactions took place between Puri and Suri during the quarter ended 31st March, 2011:
2011
Jan 11
Puri sold goods to Suri
3,000
Jan 24
Puri received a promissory note from Suri at 3 months date
2,500
Feb 01
Suri sold goods to Puri
5,000
Feb 04
4,100
Feb 07
Suri returned goods to Puri
March 01
2,800
Mar 18
4,600
Mar 23
2,000
500
March, 2011 by means of a cheque. Prepare an Account

Accounts were settled on
Current to be submitted by Puri to Suri as on 31st March, 2011, taking interest into account
@ 10% per annum. Calculate interest to the nearest rupee.
31st
To Sales
To Interest
Mar. 18
Mar. 31
Interest =
Mar. 18
Feb. 4
3,98,800 10
= ` 109
365
100
Calculation of interest:
Total
To Sales
Feb. 4
14,309
109
4,600
4,100
3,000
To Sales
Jan. 11
Jan 11
`
2,500
Jan. 1
Amount
To Balance b/d
Due Date
Jan.1
Particulars
2011
Date
13
55
79
90
Days
7,47,300
59,800
2,25,500
2,37,000
2,25,000
Products
By Purchases
By Balance of
Products
By Bank
Mar. 31
Mar. 31
By Purchases
By Sales Returns
By Purchases
By B/R
Particulars
Mar. 23
Mar. 1
Feb. 7
Feb. 1
Jan.24
2011
Date
(interest to 31st march,2011@10%p.a.)
Suri in Account Current with Puri
In the books of Puri
Mar. 23
Mar.1
Feb. 7
Feb. 1
April 27
Due Date
14,309
1,509
2,000
2,800
500
5,000
2,500
Amount
30
52
58
(27)
Days
7,47,300
3,98,800
16,000
84,000
26,000
2,90,000
(67,500)
Products
Average Due Date and Account Current 7.14
7.15
Accounting
Question 2
The following are the transactions that took place between G and H during the period from
1st October, 2010 to 31st March, 2011:
2010
Oct.1
Balance due to G by H
3,000
Oct 18
Goods sold by G to H
2,500
Nov. 16
Goods sold by H to G (invoice dated November, 26)
4,000
Dec.7
Goods sold by H to G (invoice dated December, 17)
3,500
2011
Jan. 3
Promissory note given by G to H, at three months
5,000
Feb. 4
Cash paid by G to H
1,000
Mar. 21
Goods sold by G to H
4,300
Mar.28
Goods sold by H to G (invoice dated April, 8)
2,700
Draw up an Account Current up to March 31st, 2011 to be rendered by G to H, charging interest at

10% per annum. Interest is to be calculated to the nearest rupee.
10
55
(6)
164
182
No., of days
till 31.3.11
55,000 Mar 31 Mar 31 By Balance of

product
43,000
By Balance c/d
15,850 10,24,000
50
4,300
1,000
In the books of G
H in Account Current with G
(interest to 31st march,2011@10%p.a.)
Amt.
Product Date Due
Particulars
date
`
` 2010 2010
3,000 5,46,000 Nov
Nov 26 By Purchases
16
2,500 4,10,000 Dec 7 Dec. By Purchases
17
2011 2011
5,000 (30,000) Mar 28 Apr 8 By Purchases
1,81,600 x 10 x 1
= ` 50 (approx.)
100 x 365
To Sales
Mar.
21
Mar 31 To Interest
Interest for the period =
Mar
21
Mar
31
Particulars
Due
date
2010 2010
Oct 1, Oct 1, To Balance
b/d
Oct 18 To Sales
Oct
18,
2011 2011
Jan 3 Apr 6 To Bills
payable
Feb 4 Feb 4 To Cash
Date
Answer
(8)
104
125
No. of days
till 31.3.11
1,81,600
(21,600)
3,64,000
15,850 10,24,000
5,650
2,700
3,500
5,00,000
`
4,000
Product
Amt.
Average Due Date and Account Current 7.16
7.17
Accounting
Question 3
Roshan has a current account with partnership firm. It has debit balance of ` 75,000 as on
01-07-2012. He has further deposited the following amounts:
Date
Amount (`)
14-07-2012
1,38,000
18-08-2012
22,000
He withdrew the following amounts :

Date
Amount (`)
29-07-2012
97,000
09-09-2012
11,000
Show Roshan's A/c in the ledger of the firm. Interest is to be calculated at 10% on debit
balance and 8% on credit balance. You are required to prepare current account as on 30th
September, 2012 by means of product of balances method.
Answer
Roshans Current Account with Partnership firm (as on 30.9.2012)
Date
Particulars
Dr
Cr
Days
(`)
Dr.
or
Cr.
Dr
Product
(`)
75,000
Dr.
13
9,75,000
63,000
Cr.
15
34,000
Dr.
20
6,80,000
12,000
Dr.
22
2,64,000
11,000
23,000
Dr.
22
5,06,000
457
23,457
Dr.
(`)
01.07.12
To Bal b/d
14.07.12
By Cash A/c
29.07.12
To Self
18.08.12
By Cash A/c
09.09.12
To Self
30.09.12
To Interest A/c
30.09.12
By Bal. c/d
Balance
(`)
75,000
1,38,000
97,000
22,000
Cr
Product
(`)
9,45,000
23,457
1,83,457
1,83,457
24,25,000
Interest Calculation:
On ` 24,25,000x 10% x 1/365 =
` 664
On ` 9,45,000 x 8% x 1/365 =
(` 207)
Net interest to be debited
(` 457)
9,45,000
7.18
Question 4
From the following particulars prepare a account current, as sent by Mr. Ram to Mr. Siva as on
31st October 2014 by means of product method charging interest @ 5% p.a.
2014
1st July
15th August
20th August
22nd Sep
15th Oct
Particulars
Balance due from Siva
Sold goods to Siva
Goods returned by Siva
Siva paid by cheque
Received cash from Siva
`
750
1250
200
800
500
Answer
Siva in Account Current with Ram as on 31st Oct, 2014
Dr.
Cr.
`
Days
750
123
92,250 20.08.14
By Sales
Returns
200
72
14,400
77
96,250 22.09.14
By Bank
800
39
31,200
15.10.14
By Cash
500
16
01.07.14
To Bal. b/d
15.8.14
To Sales
1,250
31.10.14
To Interest
18.48
Product
(` )
` Days
By Balance
of Products
_____
2018.48
Interest
______ 31.10.14
1,88,500
By Bal. c/d
Product
(` )
8,000
1,34,900
518.48
______
2018.48
1,88,500
5
1
= ` 1,34,900 x
= ` 18.48
100 365
Exercise
1.
From the following particulars prepare an Account Current to be rendered by A to B at 31st

December, reckoning interest @ 10% p.a.
2011
2011
July 1
July 17
Balance owing from B

Goods sold to B
600
50
Sept. 01
Oct.22
B accepted As Bill at 3 months date 250

Goods bought from B
30
Aug. 1
Aug. 19
Aug. 30
Sept. 1
Cash received from B

Goods sold to B
Goods sold to B
650
700
40
350
Nov. 12
Dec. 14
Goods sold to B
20
80
7.19
Accounting
(Hints: Interest (67,090 0.1 /365) = ` 18.38 and Balance c/d ` 68.38)
2.
Following transactions took place between X and Y during the month of April, 2011:
Date
Particulars
1.4.2011
7.4.2011
10.4.2011
10.4.2011
Amount payable by X to Y
Received acceptance of X to Y for 2 months
Bills receivable (accepted by Y) on 7.2.2011 is honoured on this due date
X sold goods to Y (due date 10.5.2011)
10,000
5,000
10,000
15,000
12.4.2011
15.4.2011
20.4.2011
20.4.2011
X received cheque from Y (due date 15.5.2011)

Y sold goods to X (due date 15.5.2011)
X returned goods sold by Y on 15.4.2011
Bill accepted by Y is dishonoured on this due date
7,500
6,000
1,000
5,000
Prepare Ys account in the books of X for the month of April, 2011.

(Hints: Interest ` 4,17,500 18/100 1/365 = ` 205.90 and Balance c/d ` 2,294.10)

Bos 28155 CP 7

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Average Due Date and

Average due date = Base date

base date to due date]

When interest is chargeable on drawings, and drawings are on

Average due date = Date of Loan + each

The Institute of Chartered Accountants of India

Average Due Date and Account Current

Calculation of interest on drawings made by the proprietors or partners of a

(ii) Settlement of accounts between a principal and an agent.

` 5,000 due on 10th March, 2011

No. of days from the base

The Institute of Chartered Accountants of India

Average due date=Base date+ Days equal to

= 10th March + 43 days =22nd April, 2011

=` 85,000 x 10/100 x 69/365 = ` 1,607 (approx.)

10th March, 2011

5th April, 2011

20th April, 2011

No. of days from

The Institute of Chartered Accountants of India

Average Due Date and Account Current

= 4th May, 2011 +

1st payment is made after 12 months from the date of loan.

Interest = ` 25,000 x 10/100 x 2 years

16th August, 2010

20th October, 2010

24th January, 2011

The Institute of Chartered Accountants of India

16th August, 2010

3 months Nov. 19, 2010

No. of days Product (no.

Dec. 22, 2010

14th December, 2010 2 months Feb. 17, 2011

24th January, 2011

06th March, 2011

2 months May 09, 2011

= November 19, 2010 +6,48,000/10,000

Let us assume 9th January, 2012 to be the base date:

No. of days from

The Institute of Chartered Accountants of India

Average Due Date and Account Current

33 days from 9th January, 2012 = 11th February, 2012

No. of days from

The Institute of Chartered Accountants of India

Average due date

Base date + Days equal to

3rd March, 2012 +

3rd March, 2012 + 128 days = 9th July, 2012

Calculation of Average due date

The Institute of Chartered Accountants of India

Average Due Date and Account Current

Average due date

= 15th Jan + 95 days = 19th April, 2012

Average due date = Base date +

No. of days from the

The Institute of Chartered Accountants of India

Computation of date of payment to earn interest of ` 150

Interest per day = [` 20,000 x (18/100)] / 365 days

` 7,000 due on 15th March, 2012

No. of days from the base

Average due date

= Base date + Days equal to