I believe that the time should be written out in full in narrative, such as nine o'clock and not 9PM. Is this correct? And if so, is it acceptable to break the rule? Also in dialogue, I am aware that numbers should be written out in full, but I need to write the following dialogue and it looks strange to me - any suggestions would be appreciated. "Where on earth have you been? It’s five A.M.”
Personally, I prefer a.m over A.M, fits better to me. It might not be correct, though. Consult a better source than me. Full narrative is preferred over numbers, but really, freakishly long ones should be used sparingly.
I think that is acceptable. Especially in dialogue. Nine o'clock is probably what you want to go with. But try looking at other books you've read. Has the author used this formal way of expressing the time? Or has he/she gone into a POV and used, e.g. "It was around nine the next morning when Jared realized his brother wasn't going to show up." You could express time, either way, in my opinion. I don't see what would be wrong with choosing the latter.
In dialogue, spell out what the character says. If she says five in the morming, write "five in the morning" (spell out the number). If he says 5 A.M. write "five A.M." (yes, A.M. is capitalized). In dialogue, it should always be in words, not numerals. It should also generally be spelled out in narrative, and it's the narrator's choice how to express it. However, it's okay to write 7:42 A.M., and either 6:30, or six-thirty, or half past six would be acceptable in narration.
According to the official Associated Press stylebook, it's 9 a.m. or 4:53 p.m. or whatever. a.m. and p.m., like that, lowercase with periods. Don't put 9:00 if it's even on the hour, just 9. Also, don't put "9 a.m. this morning" or "12 midnight," because that's redundant. If there's another guideline for novels that's different than from reporting/journalism, then I have no idea what the official rule is.
Not if it's a whodunnit and the clock was knocked to the floor in the struggle and stopped at the time of the murder!
Is "12 noon" redundant too? I mean, I'm only dimly aware that there are two five o'clocks in a day, but I'm very familiar with both 12 o'clocks. "12 a.m." is to be avoided though, as most people get that wrong (or at least have to stop and think).
For the 12's, just put "noon" and "midnight." 12 a.m. and 12 p.m. tend to confuse people. and "12 noon" or "12 midnight" just says the same fact twice. Hope I helped.
I've always done the actual numbers, probably because I've gotten so used to writing down dates on paper (example: 10/27/10) that I now automatically type numbers instead of phonetically.