Question

7. Vijay, a consultant, during the financial year 2018-19 earned ?
he received 3,50,000. He incurred an expense of 1,70,000, out of which 40,000 are
outstanding. He also received consultancy fee relating to previous year 45,000 and also
paid 20,000 expenses of last year.
You are required to determine his income for the year if
(i) he follows Cash Basis of Accounting and
(ü) he follows Accrual Basis of Accounting.
[(i)* 2,45,000; (ii) * 2,30,000.​

Answer 1

Explanation:

he received 3,50,000. He incurred an expense of 1,70,000, out of which 40,000 are

outstanding. He also received consultancy fee relating to previous year 45,000 and also

paid 20,000 expenses of last year.

You are required to determine his income for the year if

(i) he follows Cash Basis of Accounting and

(ü) he follows Accrual Basis of Accounting.

[(i)* 2,45,000; (ii) * 2,30,000.