Question

Accrued profit is ascertained on the following ways: (a) Average profit (b) Previous year's profit (c) On sales (d) All of the above.

Answer 1

Answer:

previous year profit

Explanation:

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Answer 2

The correct answer is OPTION B: Previous year's profit.

• The concept of accrual accounting is used in accounting.
• We keep track of not only cash-only transactions but also those that take place during the accounting year, whether or not they are cash transactions.
• We must account for all expenses and earnings related to the current accounting year to compute the proper profit and loss, as well as the authentic and fair financial position at the end of the year.
• Outstanding expenses, prepaid expenses, accumulated revenue, and money received in advance must all be changed as a result of this.