Question

During the Accounting period 2019-20, the total sales of the firm were Rs. 8,50,000, out of which cash sales were of 5,50,000. The total expenses for the year 6,00,000 out of which 3,10,000 are still outstanding. Determine income of the firm for year 2019-20 as per:
Cash basis of Accounting.
Accrual basis of Accounting

Answer 1

Answer:

Income ( Cash Basis )

Sales ( Cash ) = 5,50,000

Less Expenses = (290,000) (Paid only)

Income = 260,000

Income ( Accrual Basis )

Sales ( Credit ) = 300,000

Less Expenses = (3,10,000) ( Outstanding Only )

Loss = (10,000)