. This action was the result of which accounting principle? Explain. b. Do you think, the borrowed money will increase the assets/ Liabilities of the business? Yes/ No Justify your answer
3. Ali Company borrowed OMR50, 000 in December 2019 for a period of three months from Azzan and will make its interest payment three months later. The total interest for the three months will be OMR 1500. At the end of the year 2019 in the financial statement, the company reported Interest Expense of OMR 500 in Income Statement.
a. This action was the result of which accounting principle? Explain.
b. Do you think, the borrowed money will increase the assets/ Liabilities of the business? Yes/ No Justify your answer
Given information is:
Ali Company borrowed OMR50, 000 in December 2019 for a period of three months from Azzan and will make its interest payment three months later. The total interest for the three months will be OMR 1500. At the end of the year 2019 in the financial statement, the company reported Interest Expense of OMR 500 in Income Statement.
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