1. Average Due Date
Meaning
Average Due Date is the date at which neither party incure loss. Average Due Date is a breakeven date at which neither party making the payment nor the receiving the payment suffers if the payment is made on that date.
Average Due Date facilitates the calculation of interest on total amount due for the period from the Average Due Date to the actual date of settlement.
Public holidays include all Sundays, 26th Jan, 15th Aug, 30th Sept, 1st April.
Calculation of Due Date after Taking into Consideration Days of Grace:
( BOE = Bill of Exchange or PN = Promissory Note )
1. A BOE or PN Matures on the date on which it falls due. And every PN or BOE (other than those payable on demand or at sight or on presentment) falls due on the third day after on which it is expressed to be payable
(Due date + 3 days of grace
other than payable on demand or sight, or presentment)
For example - Q- One month bill payable drawn on 15/05/2018
Ans - Due date is 18/06/2018 (15/05/2018 + 1 month + 3 days Grace)
2. Due Date when PN or BOI is payable on demand or at sight or on presentment: - Due date is calculated without considering grace date. Due date is the date on which bill Matures.
For example -
Q- One month bill payable on sight drawn on 15/05/2018
Ans - Due date is 15/06/2018
3. If due date fall holiday
a.) Public Holiday - Due day is Preceeding Business Day
b) Emergency or Unforeseen Holiday - Due Date is Next Following Days
Calculation of Average Due Date
Average
Due Date
=
|
Base
Date +
|
Sum of
Product
|
Sum of
Amount due
|
Useful for :-
1. Calculation of Interest on drawing of Partner
2. Where amount lent in Various installment
3. Where amount is lent in one installment
2. Account Current
An Account Current is a running statement of transactions between parties for a given period of time and includes interest allowed or charged on various items. It takes the form of a ledger account. Three ways of preparing an Account Current :
(i) With the help of interest tables
(ii) By means of products
(iii) By means of products of balances
Topics Covered:
1. Account Current Term.2. Methods of Preparing Account Current.
3. Red-ink Interest.
Date
|
Particular
|
Due Date
|
Amount
|
Days
|
Interest
|
Date
|
Particular
|
Due Date
|
Amount
|
Days
|
Interest
|
mmyy
|
To bal b/d
|
xx
|
xx
|
xx
|
mmyy
|
By purchase
|
mmyy
|
xx
|
xx
|
xx
| |
mmyy
|
To cash Paid
|
mmyy
|
xx
|
xx
|
xx
|
mmyy
|
by cash Received
|
mmyy
|
xx
|
xx
|
xx
|
mmyy
|
To sales
|
mmyy
|
xx
|
xx
|
xx
| ||||||
To interest
|
xx 1 I
|
mmyy
|
by B/R
|
mmyy
|
xx
|
xx
|
xx
| ||||
by bal C/d
|
xx
|
xx 1 I
| |||||||||
Total
|
amount
|
int.
|
Total
|
amount
|
int.
|
