Question

7) During the financial year,Rajan had cash sales of Rs.450000 and credit sales of
Rs300000.Expenses incurred for the year were Rs.350000 out of which Rs.150000 are still
to be paid.
Find out Rajan's income following.
Cash Basis of Accounting
Accrual Basis of Accounting.

Answer 1

SOLUTION

(i) Cash Basis of Accounting

= 4,50,000 - 2,00,000 (3,50,000-1,50,000)

= Rs.2,50,000

(ii) Accrual Basis of Accounting

= 4,50,000+3,00,000-3,50,000

= Rs.4,00,000