How to treat accrued interest in income and expenditure account and in balance sheet?

Dear student,

Accrued interest is the amount of interest income that ​is due for receipt but has not been received. It is an asset for the business.

In Income and Expenditure Account, it is shown as an income in the year in which it is earned, as we make accounts on accrual basis.
In Balance Sheet, its value is either added to the Investment it is earned from or as a Current Asset.

Regards